Debenhams set to close following failed rescue talks, 12,000 jobs at risk
Dec. 1, 2020
Debenhams is set to close its stores after last-minute takeover talks fell through, putting some 12,000 jobs at risk.
The company’s administrators, FRP Advisory, announced Tuesday it had concluded the initial sale process that was part of their assessment of options for the UK business in administration.
Hopes had rested on a last-minute rescue deal from JD Sports, which fell through.
Debenhams fell into ‘light touch’ administration back in April.
FRP said the outlook for a restructured operation is “highly uncertain” given the current trading environment and the likely prolonged effects of the Covid-19 pandemic.
Debenhams to wind down business
Debenhams will continue to trade through its 124 UK stores and online to clear its current and contracted stocks. When that’s complete, and “if no alternative offers have been received, the UK operations will close”, FRP said.
This will not impact Magasin du Nord in Denmark, which continues to operate independently.
“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,” joint administrator from FRP Geoff Rowley said in a statement.
“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading. We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”
The news comes just a day after Sir Philip Green’s retail empire Arcadia fell into administration, putting 13,000 jobs at risk.
The group, which owns brands Topshop, Burton and Dorothy Perkins, said its trading had been “severely impacted” by the Covid-19 pandemic.
No redundancies have yet been announced and stores will continue to trade, the company said.
Photo credit: FashionUnited