Days after entering administration, Debenhams has struck deals with landlords that will enable it to reopen almost all of its 142 stores once the coronavirus lockdown measures are lifted.
The ailing department store chain has agreed terms on 120 outlets but it confirmed that seven stores will not reopen. Talks on the remainder of its estate are ongoing with a “handful” more sites possibly at risk.
Chief Executive Stefaan Vansteenkiste said: “I’m delighted with the progress we are making with our landlord discussions, which reflects the pragmatic view the vast majority of them are taking of the current market conditions.”
He added: “Regrettably we have been unable to reach agreement on seven stores and these will not be reopening, and I’d like to express my thanks to our colleagues in these stores at what I know is a difficult time for everyone.”
The stores that will not reopen are: Truro, Stratford-upon-Avon, Salisbury, Westfield (west London), Warrington, Leamington Spa, and South Shields. The closures will impact 442 jobs.
Debenhams had already planned to close 28 more stores in 2021 as part of its turnaround plan. It permanently closed 22 stores at the start of this year.
Debenhams entered what it described as a “light touch” administration last week. With it unable to sell the stock in its stores, the retailer was concerned about potential claims from suppliers who have yet to be paid. The administration will protect the business from the threat of legal action from its creditors that could have pushed it into liquidation.
The lockdown has exacerbated the pressures the retail sector was already facing. Major names including Oasis, Warehouse and Laura Ashley have already called in administrators.
Meanwhile, Arcadia, which owns several well-known chains including Topshop and Miss Selfridge, is reported to be preparing to walk away from a number of its property leases in order to survive the downturn.
NAM Implications:
- Key for suppliers is whether this represents sufficient change in a weak business model…
- Your call…
