Debenhams to close five stores with potential 1,000 job losses

6 May 2020, 21:57

Debenhams has confirmed it is permanently shutting five of its stores, potentially leading to 1,000 job cuts.

It comes after the retail giant failed to reach a deal with landlords over rent after it fell into administration for a second time.

It is understood that Debenhams failed to agree new terms with shopping centres in Reading, Croydon, Birmingham, Leicester and Glasgow.

As stores around the country are already closed due to lockdown, the five will not reopen once restrictions are lifted.

Around 1,000 jobs are likely to be affected.

Debenhams first collapsed in April last year, but agreed a company voluntary arrangement (CVA) with its landlords in an attempt to cut costs and save the business.

However, last month administrators were brought in again as coronavirus forced the business to shut its stores.

New terms and conditions, including a five month rent and service charge holiday, were then agreed with landlords.

Debenhams said in a statement: "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".

Debenhams currently employs just over 20,000 people in the UK.

Earlier this year it announced that its Irish business, with 11 stores, would permanently cease trading.

Britain's retail sector has been hugely damaged by the coronavirus lockdown, with figures showing a "historic" fall in sales.

Last week, 1,800 jobs were to go at the group behind Oasis and Warehouse after it announced that all of its stores will close.