DEPARTMENT store Debenhams is on the brink of administration for the second time in a year, the company confirmed today.

With its 142 stores temporarily closed, as non-grocery retail premises, and the majority of the 22,000 staff on furlough, Debenhams’ owners are seeking to push the business into administration, then to buy it back debt-free.

The store group stated: “This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation, while its 142 UK stores remain closed in line with the Government's current advice regarding the Covid-19 pandemic.”

The company, which has filed a notice of intent to appoint an administrator, added it is making preparations to open again once Government restrictions are lifted.

“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.”

The majority of its employees in the UK are now being paid under the Government's furlough scheme, after its stores uniformally closed following the shutdown of non-essential shops.

The company aims to continues to trade online across the UK, Ireland and Denmark, with customer orders, gift cards and returns are being accepted and processed normally.

Debenhams said it has the support of its lenders to enter administration and is engaging with employees and suppliers over the move.

It has five remaining North-East stores, at The Mentrocentre, Gateshead, in Eldon Square, Newcastle, at The Bridge, Sunderland, Waterloo Square, in South Shields and Newport Road, in Middlesbrough.

The company permanently closed the York store late last year and Stockton, in a tranche of closures earlier this year.

In a statement, Debenhams said: “Department store group Debenhams today has filed a Notice of Intent to appoint an administrator in the UK.

“This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the Government's current advice regarding the Covid-19 pandemic.

“The group is making preparations to resume trading its stores once Government restrictions are lifted.”

Following the news that Debenhams have called in the administrators, Andy Barr co-founder of retail commentator www.Alertr.co.uk, said:

“Debenhams has always had such a huge presence on the high-street but it still felt inevitable that they were going to be one of the retailers who got hit hard by dwindling interest from consumers.

“Department stores have struggled to keep up with cheaper, online alternatives for years now and the current climate could well be the final nail in the coffin.

“It is a hugely testing time for the high-street. Even prior to the Coronavirus pandemic it was in a state of disarray, with a new retailer seemingly going into administration each week, but, surviving this unprecedented event will be a struggle for even the biggest retailers.

“Every business needs to be willing to adapt to the changing needs of the consumer and they need to do so quickly.

“That being said, it could well be too late for the department store giant.

“Although, they are still actively trading online, it does seem a matter of when, and not if, we see the end of Debenhams.”