DEBENHAMS has “drawn up plans for liquidation” of the 242-year-old department store putting 14,000 jobs at risk.
It is feared that the potential move could trigger the biggest jobs cull of the coronavirus pandemic so far, according to Sky News.
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The retailer currently employs around 14,000 members of staff who could be at risk of redundancy if the chain doesn’t survive.
British Airways currently holds the record for the most jobs cut in one go due to the impact of the pandemic, with 12,000 employees at risk of being out of work – although this figure is under review and could be reduced.
It comes on the same day that airline Jet2 is to cut more than 100 pilot jobs, according to the British Airline Pilots Association (Balpa) union.
The travel firm is reported to be pressing ahead with the cuts despite a range of alternatives being put forward by Balpa.
Debenhams is currently looking for a buyer for all or part of the business to help it stay afloat.
But it has reportedly appointed finance group Hilco Capital, a firm which specialises in helping to wind down distressed retail businesses, to help it if a sale doesn’t go through.
At this stage, the chain, which has 124 stores across the UK, has not gone into liquidation but is making plans in case it has to.
It hopes to complete the sales process by the end of next month.
It’s the latest retailer to announce job cuts following the spread of Covid-19 with WH Smith, Boots and John Lewis all confirming mass redundancies.
Earlier this week, Debenhams announced that it will be axing 2,500 jobs which will bring the number of employees on the books down to 12,000.
In total, the chain will have culled 4,000 jobs since the start of the pandemic outbreak.
Debenhams has been struggling for several years, with the retailer having already made a raft of store closures.
It fell into administration for the second time in 12 months in April after rejecting a £200million rescue plan from Sports Direct tycoon, Mike Ashley.
The move would have seen Debenhams’ lenders agree to write off £82million of its £720million debts, which the retailer said was “not sufficient”.
Debenhams had 142 stores at the start of 2020, but it cut 19 branches in January and a further 18 didn’t reopen after lockdown.
At the time, the retailer said it had been forced to make “difficult decisions” following harsh trading conditions.
Now it says that Debenhams is doing better than expected since the end of lockdown.
A spokesperson told The Sun: “Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.
“As a result, and as previously stated, the administrators of Debenhams Retail Ltd have initiated a process to assess ways for the business to exit its protective administration.
“The administrators have appointed advisors to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors) or a sale to a third party.”
On airline redundancies, a Jet2 spokesperson said: “We are greatly distressed and deeply regret these redundancies that are entirely caused by the current situation.”