Debenhams fell into administration for the second time back in April.
Debenhams stores are now set to close as final efforts to rescue the department store chain fall through. Debenhams fell into administration for the second time back in April. Hopes had rested on a rescue bid from JD Sports, who then pulled out of the deal. With all 124 shops likely to close, all 12,000 employees are likely to lose their jobs.
The 12,000 jobs are set to go over the coming months, unless the administrators do a deal for all or parts of the business as the process unfolds. Staff were reportedly given the news on Tuesday morning. This news comes just hours after Topshop owner Arcadia collapsed into administration, putting 13,000 jobs at risk. Tough trading during the coronavirus pandemic, which saw non-essential retail shutter for months, proved to be the final blow for both retail giants.
The collapse of rescue talks is reported to be partly linked to the administration of Arcadia Group, which is the biggest operator of concessions in Debenhams stores.
Hilco, the restructuring firm which specialises in winding up retailers, will start going into stores on Wednesday to begin clearing stock.
Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP, commented: “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.”
The administrators said the outlook for a restructured operation was “highly uncertain” and they had therefore “regretfully concluded” that they should start winding down Debenhams UK, while continuing to seek offers for all or parts of the business.
The retailer had already cut about 6,500 jobs since May as it struggled to stay afloat.
Former Debenhams chairman, Sir Ian Cheshire, has said he feels “desperately sorry” for its employees. He added: “You’ve got to be so much faster and so much more online,” further noting that the chain would have been better off with about 70 stores.
The news will come as a blow to The Entertainer, which had recently brokered a deal to provide toy concessions in Debenhams stores.