- Debenhams’ Irish unit asks High Court to appoint interim examiner
- Process of negotiation with creditors expected to last up to 100 days
- Comes after several years of losses due to high operating costs
KPMG Ireland has been chosen as the interim examiner of Debenhams’ Irish arm and will negotiate with creditors to try to salvage the business.
Kieran Wallace, a partner at KPMG Ireland, was appointed by the High Court after Debenhams Ireland asked for court protection, which involves the court appointing a so-called examiner to negotiate with creditors. The court accepted Debenhams’ request on the same day as it was lodged on May 12.
The process is expected to take up to 100 days, “with a view to allowing the company to trade as a sustainable business into the future”.
The mechanism being used is a scheme of arrangement, a debt-reduction strategy agreed between the company and its creditors.
Debenhams’ Irish business has 11 stores and employs 1,415 people. Saving jobs would be a key part of the process.
The department store chain’s Irish business has experienced several years of losses, due to high operating costs such as above market rents. In its last financial year to August 2015, losses hit €6.7m.
The wider business, including the UK arm, is not affected.
Debenhams Ireland director John Bebbington said: “The directors of Debenhams Ireland will work hard to secure the long term future of the business in Ireland, enabling us to continue to serve our customers well, to provide sustainable jobs for our colleagues and to support the Irish economy.
“A key element of the examinership would be to protect as many jobs as possible. We believe this will be in the best long term interests of all our stakeholders.
“During the examinership process it will be business as usual for all of our 11 stores and online trading in the Republic of Ireland.”
Separately, the search for a replacement for Debenhams group chief executive Michael Sharp is thought to be nearing an end. Sharp announced his resignation in October. It said in April that it expected to announce his replacement “within weeks”.