Debenhams to cut 2,500 jobs after lockdown impact
Debenhams is to axe 2,500 jobs across its stores and warehouses as the high street retailer looks to slash costs after being hammered by the coronavirus lockdown.
It is the latest bad news for the department store chain that went into administration for the second time in 12 months in April.
Debenhams closed 19 stores in January and said at the time that another 28 would shut. The company said yesterday it would not close any additional stores as part of the latest round of cuts. The company did not say where the redundancies would fall.
A string of well-known high street names have announced job cuts in recent weeks including WH Smith, Dixons Carphone and Pizza Express.
A spokesperson said: “We have successfully reopened 124 stores, post-lockdown, and these are currently trading ahead of management expectations. At the same time, the trading environment is clearly a long way from returning to normal and we have to ensure our store costs are aligned with realistic expectations.
“Those colleagues affected by redundancy have been informed and we are very grateful to them for their service and commitment to Debenhams. Such difficult decisions are being taken by many retailers right now, and we will continue to take all necessary steps to give Debenhams every chance of a viable future.”
Mike Ashley’s Frasers Group, which owns Sports Direct and House of Fraser, is reported to be interested in purchasing 30 Debenhams stores. Mr Ashley is set to announce a proposed deal for the stores as soon as this week, the Mail Online reported.
He has previously made attempts to take control of Debenhams but was thwarted last year when the chain’s board rejected his advances. Instead, Debenhams went through a pre-pack administration which saw Mr Ashley and other shareholders’ investments wiped out.
Debenhams announcement came as official figures revealed there were 730,000 fewer people on employers’ payrolls in July than in March.
The unemployment rate – which does not include people out of work but not actively seeking a new job – remained broadly unchanged at 3.9 per cent but analysts forecast that number will rise sharply as the furlough scheme winds down by the end of October.