Debenhams has secured a £40m cash injection after extending its credit facilities with lenders in a bid to put the business on a more stable footing.
The retailer said the move would act as a “bridge to facilitate a broader refinancing and recapitalisation.”
Debenhams also announced it will start working with supply chain specialists Li & Fung to develop a strategic sourcing partnership. The partnership will cover Debenhams own-brand sourcing and the retailer hopes it will improve product quality and lead times, as well as resulting in better margins.
Chief executive Sergio Bucher said: “Today’s announcement represents the first step in our refinancing process. The support of our lenders for our turnaround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders and deliver a sustainable and profitable future for Debenhams.
“In addition, the partnership agreement we are announcing today with Li & Fung will be a key part of our turnaround plan. It gives us access to state-of-the-art technology in the LF Digital platform, providing end-to-end visibility across our supply chain. This will help us anticipate and respond more quickly to trends and our customers’ preferences, as well as delivering better quality product.”
Last week, landlords braced themselves for a possible company voluntary agreement (CVA) from Debenhams.
Several property sources told Drapers they thought the retailer would file for a CVA ahead of its next quarterly rent deadline at the end of March.