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Bosses at the historic high street retailer Debenhams have called in experts to help them assess their options around the process of liquidation.
Liquidation is not thought to be a likely outcome for the business at this stage but it is being widely reported that the option is being actively considered.
Debenhams, which was founded close to 250 years ago and has dozens of stores across the UK, is currently in administration and struggling to establish a viable financial footing.
The business has been in trouble for the past several years but its viability has been damaged further by the onset of the coronavirus crisis and the subsequent lockdown, which has made life extremely difficult for high street retailers throughout the country.
A company called Hilco Capital is understood to have been drafted in to work with Debenhams directors as they consider their options for the future, with liquidation among the possible avenues being looked at.
Hilco has worked with various retail businesses that were eventually entered into liquidation but that isn’t yet necessarily the way things will go for Debenhams, with recent meetings between the two companies being framed as “contingency planning” at this stage.
However, were Debenhams to enter liquidation, there would be worrying times ahead for the near 14,000 people who work for the company across the country.
Several thousand people have already been let go by Debenhams recently, with efforts being made constantly to keep the business afloat.
UK retailers suffered a tough time in 2019, with high street operators like Debenhams among those feeling a sustained squeeze on their revenues throughout much of the year.
But 2020 has turned out to be an even tougher year for high street retailers, with the coronavirus outbreak seeing levels of footfall and consumer spending plummet.
Although its bosses have insisted that they have been “trading strongly” in recent weeks, it’s clear that Debenhams faces an uncertain future and potentially no choice but to enter liquidation.
Another much-loved retailer facing financial pressure at present is Marks & Spencer, which recently announced plans to cut its workforce by 7,000 in an effort to restructure and adjust to the new norms of a world coping with Covid-19.
If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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