1400 job cuts as Debenhams permanently shuts another 5 stores

By guest author Elias Jahshan from Retail Gazette

  • Another 5 Debenhams stores will not reopen after lockdown, resulting in 1400 job losses
  • This brings its total store closures to 16 since it fell into administration last month
  • The five stores are in Birmingham, Reading, Glasgow, Leicester and Croydon
Caption courtesy by Retail Gazette

Debenhams has announced that another five of its UK stores will not reopen following the easing of lockdown restrictions, bringing its total store closures since administration to 16.

The retailer said that despite “best efforts” it had been unable to agree terms with shopping centre owner Hammerson to reopen the five stores in question, after falling into administration last month.

It has been reported that the latest tranche of closures may result in about 1400 job losses.

The five stores due to close are in Birmingham’s Bullring, Croydon’s Centrale shopping centre, Silverburn in Glasgow, High Cross in Leicester, and Reading’s Oracle, the retailer confirmed.

Fashion retailer Next has already signed new flexible leases to take over the existing beauty halls in the five stores to close.

“We can confirm that despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres, and so they will not be reopening,” a spokesman for Debenhams said.

“We continue to engage in constructive talks with our landlords and have agreed terms on the vast majority of our stores, which we look forward to reopening when government restrictions allow.

“This is no reflection on the commitment of our colleagues in these stores and we are extremely grateful for their support.”

The updates come after the department store chain appointed administrators from FRP Advisory last month and entered administration for the second time in 12 months.

Debenhams has so far struck a deal with landlords to ensure around 120 of its 142 stores would re-open after lockdown restrictions are lifted.

However, last month the retailer closed 11 branches as part of the administration process, resulting in the loss of more than 500 jobs.

Soon after Debenhams first fell into administration in April last year, it launched a CVA that included rent cuts of up to 50 per cent on some stores and around 50 stores earmarked for closure.

The first tranche of store closures – 22 sites – took place in January, well before the coronavirus outbreak sent the UK into a state of crisis.

Debenhams said plans to close the remaining 28 stores as part the CVA are still on the table, but some of those closing may be on that list of 16 that have so far been confirmed to close permanently.

It also previously stressed its intention that “there will still be a Debenhams of 100-plus UK stores” once lockdown restrictions are lifted and the administration process ends.

At the time of its administration announcement last month, the majority of its 22000 employees in the UK were being paid under the government’s furlough scheme.