High street retailers pushed to breaking point amid coronavirus pandemic
Treasured brands Debenhams and Cath Kidston are due to file for administration as the coronavirus lockdown leaves high street retailers on the verge of collapse.
The news will be a shock to shoppers, many of whom have unspent gift cards and vouchers with the two firms.
Department store Debenhams has 142 shops and employs around 22,000 people. It says it will bring in administrators to protect itself from legal action which could end the company.
Stefaan Vansteenkiste, chief executive of Debenhams says: “This move will protect Debenhams from the threat of legal action that could have the effect of pushing the business into liquidation while its 142 UK stores remain closed in line with the government’s current advice regarding the covid-19 pandemic.”
Meanwhile vintage-inspired retailer Cath Kidston will also file for administration.
Renowned for its brightly coloured designs, the company employs 941 people, of which 820 have already been furloughed.
It has 60 stores in the UK and a further 180 overseas and has appointed Alvarez & Marshal (A&M) to help find a buyer.
A spokesperson from Cath Kidston says: “The notice of intention forms part of the process by which Cath Kidston is continuing to work with A&M to explore all options for the company in the current climate.”
Neither company has gone into administration yet, and rescue deals and takeovers are still possible.
Can I get a refund if a retailer goes into administration?
Your ability to return items will depend on the policy an administrator puts into place, as some do not allow returns.
You may be able to ask of a refund for items that were bought but not delivered.
If you have been supplied with a faulty item, you may be able to get a replacement or refund under the Consumer Rights Act if the company is still trading.
You will need to make a claim to the administrator as an unsecured creditor if they are not trading during the process.
Is my warranty still valid after a company goes into administration?
If you bought an item that is faulty but came with a warranty, you should be able to claim a refund or repair from the manufacturer under the warranty terms.
Manufacturers usually cover items for at least first year of purchase. Check your documentation to see if your item is eligible.
In cases where you may have an extended warranty, provided by the retailer, your ability to claim will depend on what happens at the end of the administration period.
Can I still use gift cards or vouchers if a company goes into administration?
Gift vouchers and gift cards can be refused once a company goes into administration.
Some retailers will set a deadline for when gift cards and vouchers can be used, but this will depend on the action taken by its administrators.
If your vouchers or gift cards were bought using a credit card, and the value of the single purchase was more than £100, you may be able to claim it back under section 75 of the Consumer Credit Act.
For vouchers or gift cards bought for less than £100 or purchased using a debit card, you may be able to reclaim any unspent value from your bank using a process called chargeback.