How times change: Debenhams could hire fashion models Eva Herzigova, Yasmin Le Bon and Helena Christensen to front their sales in recent years. Now they are struggling to survive
Debenhams’ parent firm enters administration as uncertainty continues; STA Travel collapses; sushi chain’s CVA, and a shopping centre goes bust
The demise of the once mighty department store chain Debenhams took another agonising turn for the worse as their parent company has entered administration. The Times reported that owners Celine Group Holdings have hired Philip Watkins and Philip Armstrong from FRP Advisory as advisers. And perhaps more to the point the move means the firm does not have to pay overdue interest payments on £200 million of bonds due July 15.
Light touch administration
The 242-year-old firm has closed 16 of its 140 stores is currently under a so-called ‘light touch’ administration with managers still in control. ICSM Credit reported this month how the department store had called in advisers to prepare for a sale, restructure or liquidation.
Ian Carrotte of ICSM Credit said a company like Debenhams will have a huge number of creditors considering the scope of their operation. “The warning signs are there for suppliers,” he said, “it would be a mistake to grant credit to a company that is openly admitting it may go bust.”
Coronavirus forces STA Travel out of business
Business Sale Report said: “STA Travel has become the latest travel firm to fall victim to the Covid-19 pandemic. The company, which grew out of a student travel business and specialised in trips for young people, including gap years and volunteer projects, has ceased trading.”
STA Travel has more than 50 shops in the UK with around 500 workers whose jobs are now at risk.
The firm’s parent company, based in Switzerland, said the pandemic had ‘brought the travel industry to a standstill’ said Business Sale Report.
A spokesperson for the Association of British Travel Agents (Abta) said: “STA Travel will be a name that is familiar to most people who will have used them to travel or been aware of their name on the High Street, and this distressing news will sadly affect the livelihoods of hundreds of employees.”
Shopping centre goes bust
Retail Research have reported that the Grosvenor Shopping Centre in Chester went into receivership along with its car park earlier in July 2020. It was originally built in the 1960s and refurbished in the 80s. There are 101 retail units, all on one level. The shopping centre continues trading.
Wasabi seeks CVA
Company Rescue have reported that the grab-and-go sushi and bento chain, Wasabi, is the latest casual dining chain to launch a Company Voluntary Arrangement among the coronavirus pandemic.
They reported: “A CVA has been launched to drive the chain through a difficult period and to safeguard its future. Wasabi has 51 sites across the UK – 41 of which are in the capital. The slow return of office workers, low levels of tourism and the social distancing measures in place mean the future for the chain looks uncertain. If the proposal gets approved by creditors, the group expects to leave a small number of leases and negotiate rent with landlords on some of its sites. Job losses are to be kept to a minimum. Will Wright and David Costley-Wood of KPMG, are the proposed nominees of the CVA.”
Henry Birts, CEO, said: “Prior to the outbreak of the pandemic, Wasabi had been performing strongly on the back of the investment and operational improvements we had made during 2019. However, the extraordinary impact of COVID-19 on trading has meant that we now need to take additional steps to address our fixed cost-base if we are to secure the long-term future of our business. In recent weeks, we have had constructive engagement with landlords regarding better alignment of the rents of certain sites in proportion with footfall and trading, and we will continue to work closely with them over the days ahead. We strongly believe that this turnaround programme will provide us with a stable platform upon which we can emerge from this difficult period as a healthy and sustainable business, for our staff, suppliers and loyal customers.’’
Wasabi was founded in 2003. It has 1,500 staff across its 51 UK restaurants. It also runs two sites under the Kimchee brand and five restaurants in America – these not to be affected by the CVA.
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk