Debenhams to close up to 22 stores next year
The Debenhams department store chain has announced details of two proposed Company Voluntary Arrangements and plans for the closure of up to 22 stores next year.
The move will put 1,200 jobs at risk, although the retailer will try to redeploy as many people as possible.
The news follows Debenhams’ announcement in October last year in which it said it was looking to reduce its UK store footprint and have better quality shops. This included closing around 50 of its current 166 UK store stores. Today’s announcement marks the first stage of that plan.
In a statement, Terry Duddy, executive chairman of Debenhams, said: "The issues facing the UK high street are very well known. 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 two proposed Company Voluntary Arrangements are for Debenhams Retail Limited, the retailer's main trading entity, and Debenhams Properties Limited.
Debenhams said: “The CVA does not seek to compromise claims of any creditors other than certain landlords, local authorities and inter-company liabilities. All trade suppliers and the entitlements of employees will continue to be paid in full during this process.”
With further store closures likely to be confirmed at a later date, Debenhams said the final number will be dependent on its future trading performance, talks with landlords regarding changes in lease terms and rental levels, and discussions with local authorities regarding business rates.
Debenhams is now under the control of its lenders following a pre-pack adminstration deal two weeks ago. The lenders agreed to inject £200 million into the business.
The stores that are expected to close in 2020 are situated in:
- Birmingham Fort
- Great Yarmouth
- Welwyn Garden City
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