Reliance Retail has dropped out as a potential bidder to acquire for British department stores Debenhams. Debenhams had filed for a bankruptcy in April as the UK locked down. The retail chain is currently owned by a consortium of lenders, including US hedge funds and its bankers. If the sale process fails and it’s forced to liquidate, Hilco Capital has been lined up to handle that process.
The company has already closed a number of stores, with successful rivals, such as Next, taking advantage of that to snap up the spaces. It may soon close its flagship store on Oxford Street owned since 2016. It intends to exercise a break clause in the lease at the end of the year and has appointed property agents to find a temporary tenant while it works up plans to redevelop the site.
Though the site is suffering from low footfall at present, it remains a big draw during normal times and is important for the prestige beauty sales that are crucial to Debenhams. If forced to exit the store, the retailer plans to downsize the site’s retail space and sell it to Mike Ashley, CEO, Frasers.