Debenhams to close as JD Sports walks away
It looks to be all over for Debenhams as it was confirmed on Tuesday that the UK's oldest and largest department store business is to be liquidated following the end of last-ditch rescue talks.
The 124 stores will close and 12,000 jobs are likely to go as a result.
The company went into administration for the second time during the spring lockdown and despite saying it was trading strongly when stores reopened, subsequent lockdowns dealt it a death blow.
The last remaining bidder, JD Sports, walked away from Debenhams with no deal having been concluded. The Arcadia administration made Debenhams much less attractive given that Arcadia is the biggest concession holder in the chain. The prospects for Arcadia are that the group will be broken up and if the brands are eventually owned by online retailers, that would most likely mean they would pull out of department store concessions.
That was clearly too big an issue for JD, as was the interest that major rival Frasers group is showing in buying Arcadia’s brands.
With Debenhams set to be liquidated, the 12,000 jobs will be shed over a period of several months unless the administrators can do deals for parts of the business as the winding-up process unfolds.
Restructuring specialist Hilco will reportedly start going into the stores on Wednesday to begin stock clearances.
Geoff Rowley of joint Debenhams administrator FRP Advisory 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.”
As well as the massive number of jobs that will now go, the failure of the company will also leave huge gaps in UK shopping centres and on its high streets with the company operating extra-large stores, including its Oxford Street flagship.
Coming just a day after the administration filing by Arcadia, which puts 13,000 jobs at risk, it has proved to be the worst week for retail jobs – and specifically fashion and beauty retail jobs – in many years.
But the news that the administrators are continuing to seek buyers for parts of the business does hold out some small crumb of hope, although at the moment, that crumb is very, very small.
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