- Debenhams Ireland has submitted an application to the High Court to reject several rental leases
- The rental costs were previously guaranteed by the department store retailer’s UK parent
- Debenhams Ireland has claimed the rents “substantially exceed” market rates
Debenhams has applied to reject the rental leases on at least three of its stores in Ireland as part of its ongoing survival scheme.
The department store retailer has submitted an application to the Irish High Court to reject the leases on at least three of its 11 stores in Ireland, according to the Irish Independent.
The application comes as part of the retailer’s ongoing survival scheme to save the jobs of 2,265 staff, including 500 concession staff.
The leases were formerly guaranteed by the retailer’s UK parent, but Debenhams has since withdrawn financial support for its Irish arm.
The department store retailer has said in its application that it wishes to reject rental leases on outlets that “substantially exceed” market rates due to upward-only rent payment clauses.
The Irish High Court could grant Debenhams Ireland’s request, but it cannot waive the lease guarantee previously made by the retailer’s UK parent company.
The Irish High Court appointed KPMG Ireland as examiner for Debenhams in May to negotiate with creditors to reduce debt and save jobs.
The process, which began in May, can take up to 100 days and it is not yet known if any stores will close as a result, although the deadline for the report has since been extended to July 20.
Debenhams’ Irish business reported losses of €6.7m in its last financial year to August 2015.