Debenhams’ trustees working with TPR as retailer eyes administration

With its 142 UK stores closed due to the Covid-19 pandemic, the retailer 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.

According to Stefaan Vansteenkiste, chief executive of Debenhams, “these are unprecedented circumstances”.

“We have taken this step to protect our business, our employees, and other important stakeholders so that we are in a position to resume trading from our stores when government restrictions are lifted.”

The retailer has two defined benefit pension funds, the Debenhams Executive Pension Plan and the Debenhams Retirement Scheme, which both closed to future accrual in 2006. While the former is fully funded, the latter is currently undergoing recovery action.

A spokesperson for the Debenhams pension schemes said: “The trustees are focused on protecting members’ interests, and are consulting closely with TPR and the PPF. They will continue to keep members informed of developments.”

The retailer saw two company voluntary arrangements approved in May 2019, in which a £200m refinancing deal was negotiated for the schemes. However, these deals triggered the pension funds to enter an assessment period at the PPF.

Regarding today’s announcement, a PPF spokesperson said: “We are unable to comment on trading companies. We would like to reassure members of the two Debenhams pension schemes, which remain in PPF assessment, of our ongoing protection.”

According to the Sunday Telegraph, the retailer did not make its April top-up payment to help close the deficit that had previously been agreed with trustees.

A TPR spokesperson said: “We are monitoring the situation at this challenging time for staff and working closely with the company, its advisers, the PPF and trustees of the Debenhams pension schemes as they work to secure the best possible outcome for members.”