Coupled with the collapse of the Arcadia Group, this is a “truly devastating” week for the high street, said Retail Economics.
The UK’s largest department store group, Debenhams has this morning confirmed it will close its 124 stores after a viable deal to secure its future could not be reached.
Hopes had been resting on a rescue bid from JD Sports. However, the news of Arcadia’s administration yesterday (November 30) meant, as a proposition, Debenhams became less viable as many of the concessions in its stores are those brands including Topshop and Dorothy Perkins, and the sports chain pulled out.
A statement this morning said that FRP Advisory – the administrators of Debenhams – had ‘regretfully concluded that they should commence a wind down of Debenhams UK, while continuing to seek offers for all or parts of the business’.
Debenhams will continue to trade through its 124 UK stores and online to clear its current and contracted stocks. On conclusion of this process, if no alternative offers have been received, the UK operations will close. This does not impact Magasin du Nord in Denmark, which continues to operate independently.
“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,” said FRP Advisory’s Geoff Rowley. “The decision to move forward with a closure programme has been carefully assessed and, 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.”
Richard Lim, chief executive of the Retail Economics research group, said that – coupled with the collapse of the Arcadia Group – this is “a truly devastating week for the high street”.
“We can not overstate the significance of this collapse given the vast property portfolio, number of jobs impacted and the reverberations felt across the industry,” Richard commented. “This puts up to 25,000 jobs at risk in just a couple of days.”
He continued: “The reality is that Debenhams has been outmanoeuvred by more nimble competitors, failed to embrace change and was left with a tiring proposition. The impact of the pandemic has accelerated its demise but underlying issues within the business were the root cause.”
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