Is your Debenhams closing? Troubled firm shuts 22 stores
DEBENHAMS has named the first 22 stores it plans to close in a move that puts 1,200 jobs at risk and delivers another blow to struggling high streets.
The closures will leave many of the affected centres without a major department store – and with shoppers increasingly turning online, it seems unlikely that Debenhams branches will be replaced by a rival chain.
Shops throughout the UK are facing the axe and one of those earmarked, in Wolverhampton, opened only 18 months ago.
The chain said all the sites will stay open this year and are expected to shut in early 2020. It aims to move as many staff as possible to other branches.
Debenhams plans to shut around 50 of its worst-performing stores. Sales at its UK shops fell by 7.4 per cent in the 26 weeks to March 2, while profits dropped more than a third to £66million.
Analysts believe the firm expanded its high street presence at the wrong time – in the 2000s when shoppers were already starting to buy more clothes online.
The firm’s boss Terry Duddy said: ‘The issues facing the high street are very well known.
‘Debenhams has a clear strategy and a bright future, but in order for the business to prosper, we need to restructure the group’s store portfolio and its balance sheet, which
‘Another blow for the high street’
are not appropriate for today’s much-changed retail environment.
‘Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future.’
The company has arranged the first wave of closures through a restructuring process known as a company voluntary arrangement (CVA), which allows firms to renegotiate their rents with landlords.
The CVA plans need to be voted on at a meeting of Debenhams’ creditors next month, but are expected to go through.
Debenhams, which has 166 stores and 26,000 staff, crashed into administration earlier this month, weighed down by £720million of debt. Its collapse left shareholders – including Sports Direct owner Mike Ashley – with nothing. Mr Ashley made repeated attempts to buy Debenhams but was rebuffed, and dubbed the administration ‘a national scandal’. The chain is now owned by lenders such as Barclays and hedge fund Silver Point.
Gary Carter, of the GMB trade union, described the closures as ‘devastating news’ for employees.
‘ They will join the tens of thousands of retail workers made redundant in recent months,’ he said. ‘It’s another hammer blow for the high street.’