Debenhams to close with loss of 12,000 jobs
DEBENHAMS stores were due to begin a stock clearance sale today after the 242- year- old company collapsed with the loss of more than 12,000 jobs.
Liquidators will start winding up on what should have been the launch of the store’s Christmas shopping bonanza on the first day after the lockdown.
The high street chain’s fate was sealed when High Street giant JD Sports walked from a takeover deal which would have rescued the 124 stores.
City insiders believe the would- be buyer was scared off when Sir Philip Green’s Arcadia went into receivership with the loss of up to 13,000 jobs.
Arcadia – which owns brands including TopShop, Burton and Dorothy Perkins – had concessions inside Debenhams which brought the department store £ 75 million.
Critics lined up to say both Debenhams and Arcadia suffered from under- investment and had failed to adapt to the growth in online shopping.
Yesterday, Debenhams shoppers were promised up to 70 per cent off online purchases of clothes, shoes, watches and other items.
Boxes of goods to be sold off in today’s “Wild Wednesday” shopping stampede could be seen piled up inside stores ahead of doors opening.
Boris Johnson promised to support the retail sector after the pandemic claimed its two biggest commer
cial victims and sparked one of its blackest days.
His spokesman said: “It’s a deeply worrying time for
Debenhams’ staff, the employees themselves and their families. We stand ready to support them and we remain committed to supporting the retail sector.”
Debenhams’ recent history had been troubled by the internet sales boom and the retail slump during lockdown.
The company had been placed into administration twice in the space of 12 months and consultants FRP
Advisory were trying to negotiate a rescue deal.
Almost 6,500 jobs had already been axed as the administrators tried to streamline the business in preparation for a potential new owner.
But yesterday, management announced to the Stock Exchange that talks had folded. Insiders believe it is unlikely to be sold as a whole concern.
Joint administrator Geoff Rowley, said: “The economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail
industry, a viable deal could not be reached.
“While we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”
Management have appointed Hilco, a company which specialises in winding up major retail operations, and stock clearance will start immediately.
The shopworkers’ union Usdaw urged the administrators to treat staff with “fairness and dignity” as it sought meetings to discuss their future.
General secretary Paddy Lillis said: “Retail is crucial to our town and city centres. It employs around three million people across the UK.”
Former Debenhams chairman Sir Ian Cheshire said he felt “desperately sorry” for workers because the company had been “caught in a straitjacket” with too many shops on long leases.
One store supervisor said the news was “really sad”.
The worker added: “It genuinely felt like they had tried so hard and they lost the fight.
“Unfortunately the business is just outnumbered and the pandemic is something they could never have predicted.”
The shop was founded as a drapers in Wigmore Street, London, in 1778, but given its name by William Debenham who bought in 35 years later.
Business Secretary Alok Sharma yesterday promised to keep a “very close eye” on Arcadia, amid fears of a BHSstyle pensions crisis.
Worried MPs have urged chairman Sir Philip Green to use his £ 950 million fortune to plug a £ 350 million shortfall in the Arcadia pension fund.
Four years ago, he was branded the “unacceptable face of capitalism” after BHS collapsed a year after he sold it for £ 1 to a bankrupt.
Sir Philip, 68, paid £ 363 million towards the £ 571 million pensions black hole after a long campaign by MPs.
Sir Philip has yet to comment publicly on Arcadia.