(Adds details on financing, sourcing deal, background)
Feb 12 (Reuters) – Debenhams has secured 40 million pounds ($51.45 million) in additional funding from some of its lenders as it strives to find a longer-term solution to its financial problems, the embattled UK retail chain said on Tuesday.
Once the country’s biggest department store chain, the firm has been struggling with net debts of almost 300 million pounds and has given a string of profit warnings as it failed to keep pace with consumers moving online and to cheaper outlets.
It said the new loan, agreed for a period of 12 months, would act as a bridge to “facilitate a broader refinancing and recapitalisation”, adding it was still talking to its stakeholders and would conclude a “comprehensive refinancing”.
Shares in the company were on course to rise around 10 percent at opening, according to traders in London.
“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,” Chief Executive Officer Sergio Bucher said.
The company also said in the same statement it had signed an agreement with Hong Kong-listed supply chain solutions firm Li & Fung to develop a strategic sourcing partnership.
The deal would cover a material part of its own-brand sourcing over time and would improve product quality and lead-times, helping margins and costs. ($1 = 0.7774 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; editing by Patrick Graham)