Debenhams to close all 124 shops putting 12,000 jobs at risk as rescue talks fail
DEBENHAMS is set to close all of its 124 shops permanently and disappear from the high street after rescue talks to save the chain failed.
The business is set to be liquidated after JDSports pulled out of bids to save the troubled department store chain, putting 12,000 workers at risk.
Debenhams shops will remain open until current stock is sold and it’s believed that stores will close early next year.
JD Sports was the last remaining bidder for Debenhams, which has been in administration since April.
The 242-year-old retailer had been considering a potential sale since the summer after it went into administration for the second time in a year.
Debenhams has already cut 6,500 jobs since May. It currently has 12,000 workers.
The collapse comes after Debenhams’ sales in the six months to October plunged to £323million versus billions in its heyday.
It is understood the collapse of rescue talks is partly linked to the administration of Arcadia, which is the biggest operator of concessions in Debenhams stores.
Sir Philip Green’s retail empire includes brands such as Burton, Dorothy Perkins, Miss Selfridge and Topshop.
The demise of Arcadia puts 13,000 jobs at risk.
Arcadia, which runs 444 stores in the UK and 22 overseas, said 9,294 employees are currently on furlough.
Coronavirus restrictions and the closure of non-essential shops have put immense pressure on retailers and the high street this year.
Peacocks and Jaeger, which are owned by Edinburgh Woolen Mill Group, fell into administration last month, putting 21,000 jobs at risk.
Laura Ashley went bust in March, just before the lockdown was brought in, putting 2,700 jobs at risk.
It had been doing well before the pandemic struck, during the seven weeks to March 13, with trading up 24% on the same period a year earlier.
Fashion giants Oasis and Warehouse went bust on April 15 leading to 1,800 staff being placed on furlough, and 202 being made redundant.
Vintage fashion brand, Cath Kidston, closed all 60 of its UK stores in April with the loss of 908 out of 940 jobs.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: ‘’The retail house of cards on the high street is in danger of collapse with both Debenhams and Arcadia group now looking increasingly likely to face liquidation.
“A nightmare before Christmas is unfolding for 25,000 employees who will lose their jobs if buyers are not found for parts of both businesses.
“Arcadia Group’s collapse has set off a domino effect, with JD Sports pulling out of talks to buy Debenhams.
“Arcadia is the biggest concession operator in Debenhams and so its collapse into administration clearly put the frighteners on management.”
In a brief statement to the London Stock Exchange, JD Sports said: “JD Sports Fashion confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”
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Geoff Rowley of FRP Advisory, joint administrator to Debenhams, said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.
“However, 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.”