Survival plan for retailer approved
Published 20/08/2016 | 02:30
A survival plan allowing department store chain Debenhams to exit examinership has been approved by the High Court.
Under the terms of the plan Debenhams Retail (Ireland) Ltd's 11 stores are to remain open and the vast majority of the company's 1,400 directly employed staff, some 500 concession staff and 300 cosmetic staff are to be retained.
There will be some 98 voluntary redundancies, but no compulsory ones. The company operates four stores in Dublin, two in Cork, and others in Galway, Limerick, Newbridge, Tralee and Waterford.
The scheme, put together by the retailer's examiner Kieran Wallace of KPMG and agreed by the majority of Debenhams' creditors, was formally approved by Ms Justice Caroline Costello at the High Court.
Last May Debenhams Retail (Ireland) Ltd sought examinership because of consistent losses sustained since the recession in 2007, high rents, and after the withdrawal of support of its UK parent company, Debenhams Retail plc. The company said it owed its parent €46m, which it said was unsustainable.
The company will exit the examinership process on August 25.
The only objection to the scheme in Court was brought on behalf of a woman who had brought a personal injuries claim against Debenhams. Under the terms of the scheme she would get 5pc of any payment due.
Seeking the approval of the scheme, Neil Steen Bl for Mr Wallace said it had been approved by the vast majority of creditors and classes of creditors.
Counsel said that the company had secured significant cost savings that would allow it to continue to trade. The examiner reached arrangement concerning rent agreement Debenhams had with landlords of seven of its stores.
The parent company Debenhams Retail Plc had also agreed to invest in the company by way of a loan. Also, historic debts owed by the company had been written off.
Proposals put to unions Mandate and Siptu had been accepted.and 83pc of the workforce had voted in favour of cost saving proposals.