Thousands of jobs could be lost and stores across the country are at risk of closure after Debenhams was handed over to lenders on Tuesday. The department store chain entered “pre-pack” administration after rejecting a £150 million rescue deal from Sports Direct boss Mike Ashley. While Debenhams has reassured shoppers its stores will stay open for business, it’s believed many will close next year.

As Debenhams future looks bleak, financial experts have urged shoppers to spend their gift cards as soon as possible.

Do Debenhams gift cards and vouchers still work?

Debenhams gift cards and vouchers will be valid in the short term so customers can still use them for now.

That’s because only Debenhams’ holding company has gone into administration and the trading parts of Debenhams are still open for business.

However if Debenhams does go bust, or a new buyer is found then they will be under no obligation to honour gift cards, which means they could become useless.

Financial experts have urged shoppers with Debenhams gift cards to spend them now as Debenhams future looks unstable.

What the experts say

Founder of MoneySavingExpert.com, Martin Lewis, said: “Clearly, Debenhams is not in the most stable state at the moment.

“So personally I wouldn’t be buying anyone any gift vouchers from there in the future (although that doesn’t mean much as I would always suggesting avoiding gift cards and vouchers anywhere anyway).

“I’d also be very careful if I was ordering something now for delivery a decent amount of time in the future, and buying any items that might break down because returns can be difficult too if a firm goes bust.

“Having said that, if Debenhams is at the right price and right place for you, and you want to buy something there, there are ways to protect yourself.

” If goods are over £100, buy them on a credit card – although do repay in full – so that you get Section 75 protection, and otherwise pay on a debit card or credit card to get chargeback protection.

“I would certainly be wary of paying for any larger items with cash or cheque because that gives you no protection at all.”

Debenhams has said gift cards will continue to be honoured, so if you have one you can still spend it.

But remember that with gift cards, there is no protection if things go wrong.

So if you do have a Debenhams gift card you should spending it now.

What Debenhams says

In a statement on Tuesday, Debenhams reassured the public its shops would continue to trade.

The statement posted on Debenhams’ website read: “On 9 April 2019, Debenhams plc (‘the Company’) entered Administration, and Chad Griffin, Simon Kirkhope and Andrew Johnson of FTI Consulting LLP were appointed as Joint Administrators (‘the Joint Administrators’).

“The appointment was made by the Company’s qualifying floating charge holder under the provisions of Paragraph 14(1) of Schedule B1 to the Insolvency Act 1986.

“For the avoidance of doubt only the Company (which was the Group’s top holding company) is in administration – the Group’s operating companies, including Debenhams Retail Ltd and Magasin Du Nord, continue to trade as normal.

“The Group’s commercial relationships with suppliers, employees, pension and customers are all with the operating companies. Therefore the Group’s commercial stakeholders are not adversely impacted by the Company’s administration.

“Immediately following their appointment, the Joint Administrators sold the Company’s shares in the Group, to Celine Newco I Limited, an entity owned by certain of the Company’s secured lenders (“the Transaction”).

“The Transaction delivers continuity for all Group operations. It minimises business disruption, ensures continuity for the businesses and their suppliers and protects the Group’s employees. It also allows additional funding of up to £99m to be provided.”

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