Image copyrightAFPDebenhams will file for administration after the coronavirus lockdown forced it to shut its shops across the UK. It described the process as a "light touch" administration to protect it from legal action from creditors while its department stores are closed. It has furloughed the majority of its staff who are being paid under the government's coronavirus job retention scheme which pays 80% of a worker's salary up to £2,500 a month. "Debenhams has been in financial difficulties for a while so this doesn't come as a major surprise," said Julie Palmer, regional managing partner at restructuring firm Begbies Traynor. They were told that a number of restructuring scenarios were being explored which had "varying outcomes" for the business, landlords and Debenhams' 20,000 workers. Last April, Debenhams fell into the hands of its lenders, comprising a group of banks and hedge funds led by US firm Silver Point Capital, after struggling for years to keep up with competition from rivals. Image copyrightGetty ImagesImage caption Sir Philip Green controls Arcadia which owns Topshop, Dorothy Perkins and Burtons The lockdown has exacerbated the pressures the struggling retail sector was already facing. Arcadia, which is controlled by Sir Philip Green, is reported to be preparing to walk away from a number of its property leases. The firm which owns several well known High Street chains including Topshop, Wallis and Miss Selfridge, has furloughed 14,500 of its 16,000 employees since the coronavirus lockdown and said its board members and senior leadership are taking pay cuts of between 25% and 50%. Fashion chain New Look recently informed its suppliers that payment for stock already sitting in its shops or distribution centre would be delayed "indefinitely".
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