Debenhams on the verge of closing 60 stores and dismissing 12 thousand employees

The British Debenhams network, which operates 124 department stores, is going through some bad times.

The pandemic has exacerbated the already precarious financial situation of the network. In April, the company, for the second time in two years, went into external administration to regulate relations with creditors. 

According to the restructuring plan developed for potential customers, the company expects to close from 20 to 60 stores of the chain in the near term. That means a significant reduction in the number of staff, which amounts to about 12,000 people. 

Over the past few months, several companies have expressed interest in buying Debenhams. At the moment, the most likely buyer is the retailer JD Sports. The most exciting thing for JD Sports is the website of Debenhams, a company that sells sports and everyday clothing and will likely be able to fill the space by resorting to agreements with other brands. That includes more than half of the department stores operating today. 

Simultaneously, JD Sports shares have fallen by more than 6% after it became known that it was in exclusive negotiations to buy Debenhams. Such a step will bring the group to a more challenging market, attempting to gain a foothold.

The deal will likely be announced just before the New Year holidays. However, any decisions on the closure of stores and related job cuts are unlikely to be made before the end of the holiday peak trade. If the deal fails to be concluded, it may lead to the Debenhams network’s liquidation, which has a history dating back to 1778.

Photo credit: depositphotos.com.