Debenhams Enters Administration

Adrian Hyde, Insolvency Practitioner at CVR Global, believes only a total overhaul of the Debenhams brand and offering will prevent further financial problems in the years to come.

He said: “Debenhams is a brand that hasn’t done enough to change with the times and fully capitalise on the growing shift of online shopping.

“The warning signs have been there for some time, especially in their stores that have been accustomed to discounting.

“It is a massive company with around 140 stores – each of which will have been battling with high business rates and online competition.

“While this looks negative at the outset there will be some highly profitable stores in strong locations, among a large number of loss-making stores in low footfall areas.

“I think a pre-pack administration is the right course of action; the only other options for an administrator in this situation would be to shut the business entirely, or continue to trade until a buyer was found, which would have been very expensive with the number of stores they have.

“The troubles at Debenhams have been known about for some time so anyone interested in purchasing will already have thrown their hat into the ring – there would be no need for a period of marketing.

“The key to a brighter future for Debenhams is having an identity to match those of other successful high street brands such as John Lewis, Top Man or Ikea – everyone knows what those brands stand for; at the moment Debenhams is known for selling discounted clothing, perfume and some household goods – and this needs to change if they are to survive.

“There needs to be pressing reasons for customers to use the stores – and, simply, there isn’t in their current format, and major work is needed for that to happen.

“Debenhams is the latest in a long line of high street casualties and unfortunately I don’t expect this trend to end any time soon, both in the UK and abroad, in the light of opinions of an impending global recession.”