Debenhams, the struggling British department store chain, has recently announced its plans to cut an additional 2,500 jobs. This adds to the already significant job losses experienced in the country’s retail sector as a result of the ongoing Covid-19 crisis. In May, Debenhams had already laid off hundreds of head office employees, and now it joins other major retailers like Marks & Spencer, Boots, John Lewis, and WH Smith in announcing significant job cuts.

Despite the challenges faced by the retail sector, Debenhams has stated that its stores have been performing better than expected since reopening after the lockdown. However, the company recognizes that the trading environment is far from normal and therefore, it needs to adjust store costs to align with more realistic expectations.

Debenhams is determined to take all necessary measures to ensure its viability in the future. In April, the company entered administration for the second time within a year in order to protect itself from potential legal actions by creditors that could have led to liquidation. The retailer is currently owned by a lenders’ consortium called Celine UK NewCo 1 Ltd, which includes US hedge fund Silver Point Capital.

With the help of investment bank Lazards, Debenhams has started the process of evaluating potential paths for exiting administration. This includes options such as the existing owners retaining the business, forming new joint venture arrangements with existing and new investors, or selling to a third party. The assessment process will continue until the end of the following month.

The news of Debenhams’ job cuts was initially reported by The Sun. This latest development further highlights the challenging times faced by the UK retail sector as the impact of Covid-19 continues to affect consumer spending and the overall economy. Retailers are being compelled to make difficult decisions in order to survive during these uncertain times.

Sources:
The Sun
Reuters