Struggling Debenhams calls in KPMG team
Struggling department store chain Debenhams is to consider negotiating reduced rents for its sites and closures of unprofitable shops as it seeks to restore its fortunes.
The business has called in restructuring specialists from auditors KPMG to look at a number of options that could include a company voluntary arrangement to cut store costs.
Debenhams has 178 stores across the UK, Ireland and Denmark including a giant store at intu Merry Hill in Brierley Hill and a store at the Mander Centre in Wolverhampton which only opened in October last year.
The chain, which also has stores in The Old Square, Walsall, Telford and Kidderminster, has issued three profit warnings so far this year and has lost two-thirds of its share price value since January.
It already has turnaround plan in progress designed to cut costs and boost sales.
Bringing in KPMG to draw up a list of contingency measures came after leading credit insurer Euler Hermes cut cover for the second time this year after it stopped insuring new suppliers.
Debenhams has said that High Street market conditions are "challenging" and in a statement about KPMG said: "Like all companies, Debenhams frequently works with different advisors on various projects in the normal course of business.
As part of its cost cutting, Debenhams said last month that 90 jobs would be shed as it entered redundancy talks with hundreds of workers at its fashion and home departments. That followed a February announcement it was planning to cut 320 store management jobs.
It announced the intention to restructure around three business units of beauty services, fashion and home, and food and events earlier this year.
The business is also looking at raising cash by selling off its Scandinavian department store chain Magasin du Nord for as much as £200m.
Chief executive Sergio Bucher, who joined Debenhams in 2016, is also looking to improve the firm's online platform.
The chain has appointed former Domino’s Pizza executive Rachel Osborne as its new finance chief . She will join Debenhams on September 17.
Already this year House of Fraser has entered administration and Marks and Spencer has said it will close 100 shops.
There have been rumours that retail titan Mike Ashley, who recently bought House of Fraser out of administration, might be looking to merge Debenhams with House of Fraser.
The founder and chief executive of Sports Direct has been building up his shares stake in Debenhams.
Mr Ashley now owns just under 30 per cent of Debenhams which is close to the threshold at which he must launch an official takeover bid.