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Debenhams plots property deal

Department store group Debenhams is reportedly considering a sale and leaseback deal over nine of its stores as it looks to pay off debt and invest further in the company.

The department store group, which has 165 stores in the UK and Republic of Ireland, has held talks with potential investors and property specialist King Sturge, over a sale and leaseback deal over 25 years, according to The Independent.

Debenhams last month completed the refinancing of its borrowing facilities, with the signing of a new £650m credit facility. The facility comprised a £250m term loan and a £400m revolving credit facility expiring in October 2013, with an option to extend to October 2014. Following a proportion of the debt being hedged into fixed rate finance, the chain said it is anticipated that the interest cost net of fees will fall from 7% in the current financial year to 4.5% in the first full year of the new facilities.

Debenhams, which reported a like-for-like sales fall of 0.4% for the 42 weeks to June 19, last month bought footwear chain Faith, acquiring the 115 Faith concessions from administrator Mazars after the chain hit the buffers in April.

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