Department store Debenhams is on the brink of entering administration for the second time in a year, after the coronavirus lockdown forced it to close stores for business.

The company has had to shut its 142 locations across the UK and place the majority of its 22,000 staff on furlough.

Here's everything you need to know.

  • Why is Debenhams entering administration?

The current owners of Debenhams want to push the business into administration and then buy it back debt-free.

The company filed a notice of intent to appoint administrators from FRP Advisory to oversee the process on Tuesday (April 7).

In a statement, Debenhams said: "Department store group Debenhams today has filed a Notice of Intent to appoint an administrator in the UK.

“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.

ALSO READ: Hospital staff overwhelmed by public support - as new appeal launches

"The group is preparing to enter a 'light touch' administration that will see the existing management team remain in place under the direct control and supervision of the administrators.”

The group added that it is making preparations to resume trading its stores once government restrictions are lifted.

  • Can I still shop online at Debenhams?

Debenhams is continuing to trade online across the UK, Ireland and Denmark.

Customer orders, along with gift cards and returns, are still being accepted and processed as normal.

ALSO READ: Bracknell to welcome American drugs company Eli Lilly

  • What happens if I have a Debenhams store card?

Customers who have a Debenhams gift card can still spend it online, although the cards cannot be exchanged for cash or vouchers.

It is also unlikely that you will get a refund on the gift card.

If a company goes into administration, it is the responsibility of the administrator to decide whether or not it will allow gift cards to be used.

The terms and conditions on Debenhams gift cards warns that the funds are not covered by the Financial Services Compensation Scheme and in the "unlikely event of the issuer of this product becoming insolvent, some funds on the card may not be available to spend".

"There is no right to cancel an online gift card order once the gift card has been spent in full or in part,” it adds.

  • What will happen to its employees?

The bulk of Debenhams' employees are currently being paid under the government’s emergency coronavirus scheme, meaning they will receive 80 per cent of the annual wage, up to a maximum of £2,500 per month.

The department store was forced to stop trading after the Prime Minister announced a UK lockdown on March 23, with the measures initially put in place for a period of three weeks.

Debenhams said it has the support of its lenders to enter administration, and employees and suppliers are being kept informed over the move.

The retailer has closed 22 shops in recent months as part of its plans to close 50 sites, bringing its total number of locations to 110.

A further 28 stores are expected to close in the next 12 months.