Beleaguered department store Debenhams is set to close down after administrators were unable to find a buyer, putting around 12,000 jobs at risk in the latest blow to the struggling UK high street.
Administrators FRP Advisory announced this morning that they have commenced a wind-down of Debenhams UK, while continuing to seek offers for all or parts of the business.
It comes after JD Sports pulled out of talks to buy the department store chain following the collapse of Sir Philip Green’s high street empire Arcadia, which was a major concessions operator in the department stores.
Topshop-owner Arcadia appointed administrators yesterday after the pressures of the pandemic also proved to be too much for the high street chain. Between them, the two retailers employ 25,000 people.
Debenhams will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
If no alternative offers are received for the firm, the UK operations will close.
Geoff Rowley, joint administrator to Debenhams and partner at FRP, said: “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.”
He said administrators “remain hopeful” that alternative proposals for the business will be received.
“We deeply regret that circumstances force us to commence this course of action,” he said.
“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading.
“We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.”
Richard Lim, chief executive at Retail Economics, said: “We can not overstate the significance of this collapse given the vast property portfolio, number of jobs impacted and the reverberations felt across the industry.
“In a week that has seen the collapse of the Arcadia Group, this is a truly devastating week for the high street. This puts up to 25,000 jobs at risk in just a couple of days.
“The reality is that Debenhams has been outmanoeuvred by more nimble competitors, failed to embrace change and was left with a tiring proposition. The impact of the pandemic has accelerated its demise but underlying issues within the business were the root cause.”