Fri, 9th Nov 2018
Debenhams is said to be attempting to close 50 out of its 166 stores, and is preparing to announce results which include a loss of £500 million. The chain had previously said that it was planning to close 10 stores over the next five years, but is now understood to have raised that target.
The retailer’s plan will affect around 4,000 jobs. The chain has not commented on the rumours yet, and their annual results will be revealed on Thursday.
There are 25 store leases due to expire over the next five years, although it is thought that the company will want to keep some of those outlets. The retailer will need to negotiate with other landlords to end their leases early, and many landlords will be reluctant to do this since there is so much pressure on retailers. The chain has been under scrutiny since House of Fraser, a rival department store, collapsed earlier this year.
Debenhams has bee trying to reassure investors that its finances are in a good position, and originally said that their annual profits would be £33 million. They brought in KPMG to improve their performance, and to increase shareholder value. Mike Ashley, the director of Sports Direct, owns 29.7 percent of Debenhams, and recently purchased House of Fraser for £90 million. There had been some speculation that House of Fraser and Debenhams could be set to merge, but that speculation has been denied so far, and Sports Direct issued a formal statement that it had no plans to bid for Debenhams in the next six months.