The ongoing “winding down” period at Debenhams has cast doubt on the fashion company’s future as it continues to seek a buyer, and now the department store has taken it first hit of the new year. The 243-year-old retailer is closing six stores for good, including its flagship Oxford Street store in London, alongside locations in Portsmouth, Staines, Harrogate, Weymouth and Worcester.
All employees at these locations were informed last week that their stores will not reopen, the company said in a statement. The stores were already temporarily closed down amid a third round of lockdowns across the U.K. driven by the spread of a newer, highly contagious strain of the coronavirus.
Debenhams is closing the Oxford Street location since the company has been unable to agree to a lease extension with its landlord beyond its Feb. 17 expiration, as nationwide restrictions on non-essential retail are unlikely to ease until March.
In total, 320 employees will be affected by these store closures, including 140 at Oxford Street.
“We continue to engage with interested parties over alternative proposals for the future of Debenhams, but inevitably the latest lockdown has had an effect on our plans for the wind-down of the business,” said Geoff Rowley, joint administrator to Debenhams and partner at FRP Advisory, in a statement. “We regret the impact on those colleagues affected by today’s announcement and would like to thank all those who continue to keep the business trading in very difficult circumstances.”
JD Sports Fashion Plc, the sports, fashion and outdoor brands retailer, was in brief talks with Debenhams in late November to potentially acquire the department store, but later ended those discussions.
If Debenhams doesn’t find a buyer (or buyers) by March, the company would be forced to liquidate as many as 124 stores, including the six newest closures. This leaves the livelihoods of 12,000 Debenhams employees hanging in the balance.
And even if Debenhams picks up a buyer, there is no guarantee as to how many stores can remain open without a timetable of when England’s latest “stay-at-home” orders are lifted. Debenhams intends to reopen as many stores as possible after the lockdown to complete the liquidation of its remaining stock. In the meantime, closing down sales continue online.
The city of London and much of southeastern and eastern England were shut down on Dec. 20, for two weeks under an emergency lockdown. Beginning midnight Dec. 31, the Midlands, North East, parts of the North West and parts of South West England entered Tier 4 lockdowns, before the entire nation was put on lockdown on Jan. 4.
The pandemic accelerated the demise of Debenhams, which already was having a rough time attempting to keep traffic away from newer apparel upstarts such as Asos, Boohoo and Primark. The department store collapsed into administration, the U.K.’s equivalent to a Chapter 11 bankruptcy in the U.S., for the second time in as many years in April.
The closure of the Oxford Street site will also impact Debenhams’ London Support Centre, which sits above the store in the company’s headquarters. For now, London Support Centre employees will continue to work remotely in line with U.K. government guidance. The retailer’s other Support Centre, located in Taunton, remains operational.
The Oxford Street shuttering also delivers another tough blow to the overall tourist economy in the area, which has already seen the building that houses the flagship Topshop store being put up for sale. Like Debenhams, Topshop owner Arcadia fell into administration at the end of November and is currently seeking buyers for its various fashion brands.
Debenhams’ store closure announcement comes less than a week after the company’s Irish branch temporarily shuttered its e-commerce site. In a notice posted on debenhams.ie., the company said: “We are sorry but we are currently unable to deliver orders to the Republic of Ireland, due to uncertainty around post-Brexit trade rules.”
The website is all that is left of Debenhams’ presence in Ireland, with the department store liquidating its stores throughout the country last April after they closed in the first lockdown.