Credit, Collections & Insolvency News
Department store chain Debenhams is to be wound down after Christmas, with the loss of up to 12,000 jobs and closure of 124 stores.
The first branch closures are expected in the new year, with all expected to close down by the end of March. Debenhams has been trying to find a buyer but its administrators have not received “a deliverable proposal”. JD Sports had been in talks over acquiring the chain but withdrew after Arcadia – which operated more concessions in Debenhams than any other retailer – collapsed into administration.
Commenting on the news Dr Gordon Fletcher, retail expert from the University of Salford Business School said “Today’s announcement of Debenhams winding down is the first ripple in the aftermath of the Arcadia announcement yesterday. This is a ripple that starts with the concessions that Arcadia’s brands have in Debenhams stores, extends to the general uncertainty in high street retail and has then brought a moment of reflection within JD Sports and its decision to prop up the struggling department store chain.”
“Today’s announcement reconfirms what has long been known. The UK high street is increasingly a fragile house of cards that suffers from a concentration of ownership, insufficient investment to keep pace with online developments and a general lack of dynamism and engagement between brands and consumers.”
“This decision affects the 200 year old chains 124 outlets and 12,000 employees across the country. It is a closure of the chain that mirrors the complete failure of Woolworths over ten years ago. The parallels are important too. As a department store retailer the spaces that will be left on the high street are large and will be impossible to fill like for like.”
“For high streets across the UK the prospect of more plywood hoardings where once there were window dressings is a grim and unappealing offering to already jaded consumers.
Nick Hill, Customer Advisory Manager at the Money and Pensions Service, said “This is clearly a difficult time for all sectors, including retailers and following the news about Arcadia last night there will now be thousands of Debenhams staff who will understandably be very concerned about their jobs, pensions and overall financial security as a result of this news. Staff should check what they’re entitled to from their employer, including redundancy and holiday pay, and to consider that they may need to review their wider financial situation.”
Whilst Adam French, Which? Consumer Rights Expert, said “This is yet another devastating blow for the high-street, which is struggling now more than ever. The pandemic and lockdown measures have exacerbated the struggles bricks and mortar stores were already having trying to compete with online retailers.”