Debenhams has confirmed more branches will not reopen after lockdown restrictions begin to ease.
Debenhams fell into administration in April for the second time in a year, but made deals with landlords to keep most of its 142 stores open.
Here’s what you should know about the stores that will close.
Why are Debenhams stores closing?
Debenhams first collapsed in April 2019, but agreed to a company voluntary arrangement (CVA) with its landlords to cut costs in order to save the business.
As part of the agreement, the retailer had to close 22 stores in January 2020. A further 28 closures are planned for 2021.
At the beginning of April 2020, Debenhams still had 142 stores operating.
However, in April 2020, it was forced to appoint administrators for the second time in a year to protect it from its creditors, as the Covid-19 crisis forced the chain to shut its stores on a temporary basis.
Negotiations with landlords were accelerated to agree new terms and conditions, which included a five-month rent and service charge holiday.
Although Debenhams has managed to strike deals on most of its stores, in the last few weeks it has emerged that a number of branches will close permanently once the government lifts restrictions on non-essential shops.
In April 2020, seven store closures were announced, and a further five have now been confirmed.
The retailer is still trading online "normally" while its shops are temporarily closed.
Why has Debenhams been experiencing difficulty?
The department store chain had been struggling for years to keep up with competition from its rivals.
Last year, it fell into the hands of its lenders, which comprised a group of banks and hedge funds led by US firm Silver Point Capital.
Debenhams has also faced rising costs in running its big stores, alongside dealing with a large amount of debt.
The coronavirus lockdown, which has forced all stores to close temporarily, has caused further problems for the business.
Which stores closed in April 2020?
Last month, when the chain was forced to appoint administrators again, Debenhams closed seven outlets.
These were:
- Truro
- Stratford-upon-Avon
- Salisbury
- Westfield, West London
- Warrington
- Leamington Spa
- South Shields
Which five other stores are set to close?
Debenhams will now close a further five of its stores located in shopping centres owned by Hammerson, having been unable to agree new terms with the landlord.
The following five Debenhams stores will not reopen after lockdown:
- Bullring in Birmingham
- The Oracle in Reading
- Centrale in Croydon
- Highcross in Leicester
- Silverburn in Glasgow
In a statement, Debenhams said:"We can confirm that despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres, and so they will not be reopening.
"We continue to engage in constructive talks with our landlords and have agreed terms on the vast majority of our stores, which we look forward to reopening when government restrictions allow."
How many jobs will be affected by these store closures?
About 1,000 jobs will be affected, including concession staff.
Debenhams has already furloughed the majority of its staff who are being paid under the government's coronavirus job retention scheme.
The scheme pays 80 per cent of workers’ salaries, up to £2,500 a month.
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