British department store chain Debenhams is preparing to enter administration for the second time in a year to protect the business from legal action from creditors during the coronavirus emergency that could have pushed it into liquidation.
The retailer said on Monday it had filed a notice of intent (NOI) to appoint an administrator.
With Britain in lockdown during the pandemic, Debenhams' 142 UK stores are currently closed, while the majority of its 22,000 workers are being paid under the government's furlough scheme. It continues to trade online.
It is making preparations to resume trading its stores once the government restrictions are lifted, with the filing of a NOI in the UK a first step in that process.
"The group is preparing to enter a 'light touch' administration that will see the existing management team remain in place under the direct control and supervision of the administrators," it said.
It has the support of its lenders who plan to provide the funding for the administration and continues to fully engage with all suppliers while operating within a protective arrangement.
Debenhams went into administration in April last year, wiping out equity investors, including Mike Ashley's Sports Direct, and is now owned by lenders consortium Celine UK NewCo 1 Ltd.
On Monday it appointed Geoff Rowley and Alastair Massey of FRP Advisory to advise in relation to the possible administration.
"With (owners and lenders) support and working with other key stakeholders, including landlords, pension trustees and business partners, we are striving to protect jobs and reopen as many Debenhams stores for trading as we can, as soon as this is possible," said CEO Stefaan Vansteenkiste.