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Summary
- Debenhams, the 242-year-old iconic retailer, will be liquidated after Christmas
- Attempts to rescue Debenhams failed when the British sports-fashion retail firm JD Sports pulled out of discussions to rescue the company
- Debenhams had been in administration since April, now it will be shutting down all its 124 shops across the UK, leaving over 12,000 employees jobless
In a major blow to the British retail segment, Debenhams, the 242-year-old iconic retailer is going to be liquidated. It will be shutting down all its 124 shops across the UK, putting jobs of over 12,000 employees at risk.
The development comes after attempts to rescue the ailing store chain failed when the British sports-fashion retail firm JD Sports Fashion Plc (LON:JD.) the lone bidder left, pulled out of discussions to recuse the company.
In a statement, JD Sports said the talks with the Debenhams’ administrators about the prospects of its UK business now have been terminated.
Since April, Debenhams had been in administration, and the retailer had already reduced its store collection and slashed nearly 6,500 jobs in order to remain afloat. In fact, the retailer was desperately looking for a suitable buyer to escape liquidation. And now, the hopes of the retail store chain ended after JD Sports pulled out of talks.
In the meantime, Sir Ian Cheshire, the former chairman of Debenham, said he is worried about the company’s workers. The retailer has been running too many high street outlets with massive rentals, especially during the COVID-19 pandemic. He added that the retail store chain could have survived and recovered to some extent if it would have operated fewer stores than the current 124 across Britain.
Debenhams administrators have also expressed their doubts about the future outlook of the store chain. They said the store chain’s restructured operation was highly ambiguous and the company should begin wrapping up its business.
Also read: Debenhams bidders get two days deadline
A few days back, Arcadia Group, the owner of renowned fashion brands like Topshop, Burton and Dorothy Perkins, fell victim to the COVID-19 storm. The fashion giant has hired administrators from Deloitte to assess all available options for future business. The COVID-19 pandemic has taken a high toll on the Group’s business, and it failed to secure funds to pay its debts.
JD Sports Fashion pulling out of the Debenhams deal is being related by some analysts with the Arcadia Group’s collapse, as Arcadia is the biggest concession partner of Debenhams and now makes the deal less appealing to the company.
