DEBENHAMS IN BATTLE FOR SURVIVAL
Latest blow for the high street as crisis team called up to help struggling chain
DEBENHAMS could shut up to 80 stores, putting thousands of jobs at risk – experts have warned.
Shares fell 10% yesterday after bosses called in crisis managers KPMG to help slash costs as they fight to save the chain.
High street expert Bill Grimsey warned: “Debenhams is like House of Fraser – it’s knackered. They’re going to dump a load of stores because they can’t afford them.”
AILING Debenhams was fighting for its life last night to avoid becoming the latest high street casualty.
The department store chain called in advisers KPMG to help plot a survival strategy that could include closures.
Shares fell 10% yesterday after bosses admitted turning to the crisis team.
The retailer, which employs 27,000 and has over 1,000 suppliers, said it was on track for around £33million profit this year, within the expected range but down from £95million last year.
Its stock market value crashed to £126million. It has around £320million debts and £4.6billion lease obligations.
Experts warned it would have to up its game as well as cutting costs.
High street tsar Bill Grimsey said: “I wouldn’t be surprised if they closed 50 to 80 stores. They’re going to dump a load because they can’t afford them. But the risk is they’ll ultimately go bust unless they improve their products.”
The former Wickes DIY and Iceland boss, who has published a high street review, added: “Debenhams is like House of Fraser, it’s knackered.”
Retail analyst Richard Hyman added: “Debenhams has far too many stores. A lot would have to go. They have to get good at fashion. It’s their Achilles heel.”
Debenhams said only two of its 165 stores are loss-making, although it has warned another 10 risk becoming so.
Boss Sergio Bucher said: “Product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity.”
There was speculation Sports Direct boss Mike Ashley, who owns nearly 30%, could merge it with House of Fraser which he bought out of administration.
Mr Grimsey yesterday urged MPs to replace business rates for retailers with a sales tax. The Daily Mirror’s High Street Fightback campaign seeks to save stores in the face of online competition.
Chancellor Philip Hammond has vowed to “rebalance the playing field”.
The Mirror has also partnered with the Great British High Street Awards.
DEBENHAMS’ struggles are another good reason why we need to save our local shopping centres.
The retailer joins an ever expanding High Street chain of famous stores in trouble.
We need an imaginative strategy to revive high streets for the sake of thousands of workers and many more customers.
Boarded-up buildings in town and city centres not only look an eyesore but drain the life out of once thriving communities.
Ministers must offer financial incentives and new ideas to breathe fresh life into these public spaces before it is too late.
Internet shopping is popular but online retailers enjoy favourable treatment so it’s about time the tax-avoiding Amazons of this world were forced to play fair.
Saving the High Street is for the public good and must be a priority.