Written by: Keith Tully
Published: 16th January 2019
The department store business Debenhams could be set to close down 90 of its stores and shed as many as 10,000 jobs in the process, it has been reported.
Carrying out such as large number of closures would form part of a radical rescue plan for the company which has been struggling to stay afloat in recent months.
Plans to close 50 of the 165 Debenhams stores currently in operation had already been announced but between 30 and 40 more outlets could also now be heading for closure, according to the Daily Telegraph.
Debenhams has been forced by financial necessity to pursue quite dramatic business rescue efforts in recent months and has come close to going out of business entirely.
The company has seen its share price slide by almost 90 per cent over the course of the past year and in October reported full year losses worth close to £500 million.
Debenhams’ chief executive Sergio Bucher said of plans to close 50 of his company’s UK stores last year: “We are taking tough decisions on stores where financial performance is likely to deteriorate over time.”
Key issues understood to be contributing significantly to Debenhams’ financial woes include very large rent liabilities, intensifying competition in online retail environments and a decline in the number of shoppers venturing out to high street stores.
Debenhams was initially formed as a business in London in the late 18th century but its future is now highly uncertain with its bosses having to work hard to establish and implement a viable rescue and turnaround strategy.
House of Fraser, which has long been a key rival for Debenhams, fell into administration in August last year but was acquired by Sports Direct for a fee of £90 million.
Sports Direct is owned by Mike Ashley, who also has a 30 per cent stake in Debenhams.
Among the growing number of hugely well-known retail businesses to be in the process of large-scale restructuring processes is Marks & Spencer.
M&S has said recently that it intends to shut down around 100 of its stores over the next few years, with 30 of them having already been closed.