Britain's Debenhams not actively pursuing major store restructuring
* Chairman says CVA remains an option in the future
* Critical of media "circus" around firm
* Says Debenhams has a future with new format
* Shares rally as much as 4.2 pct
By James Davey
LONDON, Sept 11 (Reuters) - British department store
retailer Debenhams said on Tuesday that while major
store closures were an option, the company was not actively
pursuing this route.
Shares in Debenhams slumped on Monday after news that the
remit of adviser KPMG had been widened to include consideration
of a Company Voluntary Arrangement (CVA), which allows retailers
to avoid insolvency or administration by offloading unwanted
stores and securing reduced rents on others.
"The implication of the (weekend) papers was we were
actively driving a CVA with KPMG and it's simply not true,"
Debenhams' chairman Ian Cheshire told BBC radio, adding that all
options remained open for the future.
CVAs have been used by British groups including fashion
chain New Look, floor coverings retailer Carpetright,
mother-and-baby goods company Mothercare and most
recently home improvements chain Homebase.
Debenhams, which has issued three profit warnings this year
and whose shares have lost two thirds of their value, sought to
reassure investors by rushing out a trading statement on Monday
saying it would meet analysts' profit forecasts for 2017-18.
"Anyone who's actually studied the subject would know we're
not insolvent," Cheshire said, adding that KPMG has been working
with Debenhams for three years.
"We saw this sort of circus develop over the weekend. It's
like having a bunch of nosey neighbours watching your house."
"Somebody sees somebody in a suit going into a room, the
second person concludes it's a doctor, the third person
concludes it's an undertaker and by the time you get to the end
of the day you've got cause of death and everyone's looking
forward to the funeral," Cheshire, a former CEO of home
improvement retailer Kingfisher, said.
The fall in Debenhams' share price reflected a combination
of structural shifts in retail and an "extraordinary year of
upheaval" in the department store sector which has seen rival
House of Fraser go bust and market leader John Lewis
issue a huge profit warning, he added.
Cheshire said there was a future for an updated Debenhams
format in Britain, noting that the department store remains the
biggest seller of make-up in the country.
"We've got lots of things we can do. The challenge for us is
we've identified a new format - now how do we move from the
legacy of many years of very long leases?," he said.
"There is room for ... what I would call the Selfridges of
the high street, which brings newness and fashion and beauty,"
Cheshire said referring to the upmarket department store rival.
Debenhams' shares were up 0.3 pence at 11.9 pence at 0839
GMT, valuing the business at 144 million pounds ($188 million).
($1 = 0.7653 pounds)
(Reporting by James Davey
Editing by Alexander Smith)
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.