THE WHAT? UK retailer Debenhams is set to go into liquidation in the new year, a development that puts 12,000 jobs at risk and highlights the crisis on the UK high street, according to a report by The Financial Times.
THE DETAILS Despite looking for a rescue bid in the final hour, the company’s administrator KSR, appointed in April, stated that the uncertain outlook for 2021 meant that ongoing trading was not possible.
Debenhams will remain open over the lucrative Christmas period and cease operations in the first quarter of 2021.
THE WHY? The retailer’s woes began with a burden of debt during a period of private equity ownership, with Debenhams having to sell freehold real estate to then lease it back.
Despite reducing its debt following a return to the stock market, the pandemic ‘blew a hole out of the side of it’ according to Ian Cheshire, former Debenhams Chair.
The liquidation of Debenhams is said to be hurt footfall for many other retailers on the high street, particularly in shopping centres.
Geoff Rowley at FRP said, “The decision to move forward with a closure programme has been carefully assessed. While we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”