The UK’s largest department store chain is the latest tragedy to hit the struggling UK high street after unveiling plans to shut up to 50 branches for good over the next three years. It was confirmed today the first wave would impact 22 stores, should creditors back the recently launched Company Voluntary Arrangement (CVA). It is understood the closures would take place in early 2020, shortly after the Christmas shopping period, affecting 1,200 members of staff. Once the final stores have been shut down, Debenhams will have lost around a third of its 166 branches.
The 22 stores expected to shut early next year include: Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney and Wolverhampton.
Terry Duddy, Debenhams executive chairman, said: “Debenhams has a clear strategy and a bright future, but in order for the business to prosper, we need to restructure the group’s store portfolio and its balance sheet, which are not appropriate for today’s much changed retail environment.
“Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future.”
The planned closures comes after Debenhams’ new owners launched the CVA to start the process of the closures.
Jim Tucker, a senior restructuring partner at KPMG and proposed supervisor of the CVAs, said: “Today’s announcement marks the next phase of Debenhams’ financial and operational restructuring strategy, following the comprehensive funding package announced at the end of March.
“If approved, and with the support of lenders and landlords, the CVAs will allow the business the flexibility to implement its turnaround strategy with a store estate that reflects the current UK retail environment.”
Debenhams briefly fell into administration earlier this month, after rejecting several rescue offers from Sports Direct boss Mike Ashley.
Administrators were appointed after billionaire business tycoon Mr Ashley made a revised £200million rescue offer for Debenhams, following the rejection of his initial £150million bid.
The secured lenders that have now taken control of Debenhams are a mix of banks and US hedge funds, such as Barclays, Bank of Ireland, Silver Point and GoldenTree.
Shortly after new owners took control, it was revealed the boss of Debenhams would leave the company following its pre-pack administration.
Chief executive Sergio Bucher joined the high street retailer almost three years ago in May 2016.
Mr Duddy took the reins as interim executive chairman, while a search for a new CEO is conducted.
He said at the time of taking over: “Debenhams now has a clear path towards a viable and sustainable future and we have Sergio and his team to thank for that.
“With a positive, professional approach, he has acted at all times in the company’s best interests, and we wish him all the best for the future.”
Mr Bucher joined from Amazon two years ago, where he ran the tech giant’s European fashion business.