Further store closures loom at Debenhams

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Yesterday Debenhams issued store reopening plans for once the lockdown measures are eased. It plans to reopen 120 stores from 15 June, starting with around 90 stores in England.

It has already announced the permanent closure of 17 stores across the UK since it collapsed into administration on 6 April, including: Borehamwood, Clapham, Kidderminster, Kings Lynn, Leamington-Spa, Merthyr Tdyfil, Rugby, Salisbury, South Shields, Southampton, Stratford, Swindon, Truro, Westfield, Croydon, Leicester, Reading. 

However, the future of five of its stores are still under discussion with landlords. The exact store locations are not yet known.

A source close to the situation said some of those stores will “hopefully” reopen. 

Meanwhile, Drapers also understands that Debenhams will be keeping two of its Hammerson-leased stores, which were initially snapped up by rival retailer Next for the launch of a new beauty hall concept. 

The Beauty Hall from Next was expected to be launched in five flagship locations at Hammerson shopping centres. They were going to be based in Debenhams stores in Bullring and Grand Central in Birmingham, The Oracle in Reading, Highcross Leicester, Silverburn in Pollock near Glasgow and Centrale in Croydon. 

However, the two stores in Birmingham and Glasgow will continue to be leased by the department store. The remaining three Debenhams stores will be closed and taken over by Next.

Drapers understands Debenhams has agreed to pay Hammerson a high rent “at pre-administration level” on the two stores.

Debenhams has also confirmed that its five Welsh stores in Cardiff, Swansea, Newport, Wrexham and Llandudno will remain open. It had previously warned the Welsh government that if it did not reverse its U-turn decision on business rates relief, then the majority of its stores in Wales would not reopen, putting around 900 jobs at risk. 

The Welsh Government had initially said it would match chancellor Rishi Sunak’s business rates holiday to all retail, leisure and hospitality firms for a year. However, it has since decided not to extend relief to properties with a rateable value of £500,000 and above.

Debenhams yesterday cut hundreds of head office roles following its second collapse into administration earlier this year.

The struggling department store group appointed advisory firm FRP Advisory as administrators on 9 April, to protect the UK business from liquidation.

On 16 April, Kieran Wallace and Andrew O’Leary of accountancy firm KPMG were appointed as joint provisional liquidators of the Irish business. Debenhams directors have also commenced a liquidation process on Debenhams Hong Kong, which includes its Hong Kong and Bangladesh sourcing offices.

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