DEBENHAMS has confirmed that 19 of its stores will be closing in January 2020 in a desperate bid to save the chain.
What branches are set to close, and why?
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How many Debenhams stores are closing?
Debenhams is shutting 19 of its stores this month, as it continues its massive programme of shop closures.
At the end of 2018, it was revealed that Debenhams was set to close 50 of its stores.
But 19 stores have been confirmed to shut in the next three weeks, including Altrincham, Wolverhampton, Ashford and Wimbledon.
Which Debenhams stores are closing?
Here’s the full list of closures announced so far:
- Already shut: York, Haverfordwest and Orpington
- January 11: Altrincham, Greater Manchester; Kirkcaldy, Fife; Wandsworth, London; Birmingham The Fort; Walton-on-Thames, Surrey; Wolverhampton
- January 15: Chatham, Kent; Slough, Berkshire; Welwyn, Hertfordshire; Great Yarmouth, Norfolk; Witney, Oxfordshire; Stockton-on-Tees, Co Durham
- January 19: Ashford, Kent; Canterbury, Kent; Folkestone, Kent; Southsea, Portsmouth; Eastbourne, East Sussex; Southport, Merseyside; Wimbledon, London
Why is Debenhams closing some of its stores?
It’s believed to be a combination of increasing rents, business rates and a rise in online shopping.
Richard Lim of Retail Economics, told the BBC in October 2018 that Debenhams is operating in the part of the market under the most intense amount of pressure.
He said: “Put simply, department stores are incredibly expensive to run.
“The combination of too much space, inflexible leases and spiralling operating costs are set against a backdrop an accelerating behavioural shift towards online and experiences.
“This is eroding their profitability and changes in the business need to occur at a pace if they are to survive.”
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Speaking at the time, Debenhams executive chairman Terry Duddy said: “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 retailer, which employs 25,000 staff, is now in the hand of lenders as part of this process.
They took control of the struggling retailer which wiped out the investments of shareholders, including Sports Direct billionaire Mike Ashley.
It would have seen Debenham’s lenders agree to write off £82million of its £720million debts, which the retailer said was “not sufficient”.
Instead, it has chosen to implement a “pre-pack administration”
This is an insolvency process for a business to sell its assets before appointing administrations.
It is a powerful way of selling on a business to a third part of buyer.
The deal doesn’t mean that Debenhams will disappear from the high street but some stores will still close.
Are the stores still taking gift cards?
Customers are still able to spend their gift cards as stores will continue to trade as normal.
However shoppers have been urged to use any gift cards they have while the retailer is still accepting them.
Gift cards, orders and returns are still being accepted as usual.
MoneySavingExpert.com founder Martin Lewis warned shoppers not to buy any new gift cards from the retailer.
He said: “Clearly, Debenhams is not in the most stable state at the moment. So personally I wouldn’t be buying anyone any gift vouchers from there in the future.”
Mr Lewis also says shoppers should be careful about what they order or buy from the retailer and recommends they make purchases on card so they’re protected if something goes wrong.
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