Struggling Debenhams has netted a £40m credit score facility because it continues talks with lenders to safe its monetary future.
The division retailer chain, which is finishing up a metamorphosis plan in trade for continued assist from banks, mentioned the brand new funds would “act as a bridge to facilitate a broader refinancing and recapitalisation”.
Debenhams mentioned it hoped to conclude a “complete” settlement sooner or later.
The corporate has additionally agreed a deal in precept with retail inventory specialist Li & Fung, which goals to enhance its items and controls.
The information helped the corporate’s market worth – which had been languishing slightly below £40m – achieve in early offers as shares rose greater than 40%.
Debenhams is seeking to speed up its turnaround, which can see dozens of shops closed and 1000’s of jobs misplaced.
The price-saving aspect is essential if lenders, which have already got a borrowing facility above £500m, are to assist a refinancing at a time of disaster for the broader excessive road as buyers make fewer visits in favour of on-line transactions.
Debenhams, which issued a collection of revenue warnings final 12 months, reported a three.6% fall in comparable gross sales over the festive season.
:: Debenhams lenders brace for restructuring
Debenhams’ battle for survival is being fought on a number of fronts.
Shareholder opposition, led by Mike Ashley’s Sports activities Direct, resulted in chief govt Sergio Bucher being voted off the board final month.
Chairman Sir Ian Cheshire give up within the aftermath of the vote, with former Dwelling Retail Group boss Terry Duddy taking his place on an interim foundation.
Mr Ashley, who final 12 months rescued fierce Debenhams rival Home of Fraser out of administration, has a holding of just below 30% in Debenhams.
He had supplied a monetary lifeline of his personal to the board however was rebuffed.
In its replace to buyers on Tuesday, the corporate mentioned its new strategic sourcing partnership with Li & Fung could be anticipated to “cowl a cloth a part of our own-brand sourcing over time and can ship advantages for each our clients and our stakeholders, by improved product high quality and lead occasions; increased achieved margins; and higher working capital effectivity.”
Mr Bucher added: “Right this moment’s announcement represents step one in our refinancing course of. The assist of our lenders for our turnaround plan is necessary to underpin a complete resolution that may take account of the pursuits of all stakeholders, and ship a sustainable and worthwhile future for Debenhams.”