British department store chain Debenhams has denied media reports that it is considering a company voluntary arrangement (CVA).
The company’s shares fell by 10% on Monday following media speculation, reported The Guardian.
In response, the company issued a statement with the London Stock Exchange (LSE) noting that it will continue to focus on priority actions to mitigate current market conditions and drive progress in the fiscal year (FY) ending 2019.
In addition, its shareholders will have an opportunity to see Debenhams’ redesigned strategy in action at its new Watford store on 24 September 2018.
Debenhams CEO Sergio Bucher said: “The market environment remains challenging and underlying trends deteriorated through the summer months.
“Nevertheless the product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity ahead of peak.
“Having put in place a leaner operational structure and strong leadership team, and taken action to strengthen our financial position, we are well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge.”
Reports emerged that Debenhams hired professional service company KPMG to find potential ways to restructure the company.
GlobalData UK retail research director Patrick O’Brien said: “Debenhams may still be profitable and has the possibility of bringing in £200m-plus from the sale of Magasin du Nord, but its long-term performance is still going to be under huge pressure, and with it carrying £4.6bn of lease commitments (as of September 2017), both it and its landlords know that these will need to be addressed soon unless there is a marked upturn in the fortunes of the UK high street.’’