Debenhams strikes deals to rescue most stores
Debenhams says it has struck deals with landlords to keep most of its 142 stores open after it fell into administration last week. It has agreed terms on 120 branches and is in “advanced” talks on the remainder of its estate, it added.
But seven stores will not reopen when the government lifts coronavirus restrictions on non-essential shops.
However, the department store chain acknowledged a “handful” more sites could be 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.
“We have agreed terms on the vast majority of our UK stores and talks are proceeding positively on the remainder, positioning us to reopen these stores when government regulations permit.
“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.”
In all, 422 employees across the seven stores will be affected and have been informed, Debenhams said.
It added that the plan to close 28 more stores as part of last year’s company voluntary arrangement remained, but the intention was there would still be a Debenhams of more than 100 UK stores.
Debenhams is currently in what it describes as a “light touch” administration to protect it from legal action from creditors while its department stores are closed.
The retailer is still trading online “normally” while its shops are closed.
It has furloughed the majority of its staff who are being paid under the government’s coronavirus job retention scheme which pays 80% of a worker’s salary up to £2,500 a month.
The lockdown has exacerbated the pressures the retail sector was already facing.
Arcadia, which is controlled by Sir Philip Green, is reported to be preparing to walk away from a number of its property leases.
The firm which owns several well known High Street chains including Topshop and Miss Selfridge, has furloughed 14,500 of its 16,000 employees since the coronavirus lockdown and said its board members and senior leadership are taking pay cuts of between 25% and 50%.
Arcadia is also facing uncertainty over the future of its concessions in Debenhams’ stores.