As part of an ongoing refinancing process, beleagured national chain Debenhams has agreed an additional 12-month senior secured credit facility with some of its current lenders, together with the waiver and amendment of certain covenants, to provide the retailer with £40m of increased liquidity.

Debenhams says that this new agreement, which contains provisions for a step-up in pricing during Q2, will act as a bridge to facilitate broader refinancing and recapitalisation. 

It also says that it continues to make operational improvements to support the business turnaround under its Redesigned strategy in the meantime, and plans to work with supply chain solutions partner Li & Fung to develop a strategic sourcing partnership. This agreement is expected to deliver improved product quality and lead times, higher margins and better working capital efficiency.

Sergio Bucher, CEO, says: "[This] 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."