Debenhams, the oldest and largest department store business in the UK, is facing closure after failed attempts to secure a rescue deal. This will result in the liquidation of the company and the loss of 12,000 jobs across its 124 stores. The news is a significant blow to Debenhams, which had already entered administration for the second time during the spring lockdown. Despite claiming to trade strongly after reopening, the successive lockdowns took a severe toll on the company’s operations.

The last remaining bidder for Debenhams, JD Sports, walked away from the deal without reaching an agreement. The administration of Arcadia, Debenhams’ biggest concession holder, made the company less attractive as Arcadia is expected to be broken up, making its brands potentially available to online retailers. This raised concerns for JD Sports, particularly given the interest shown by major rival Frasers Group in acquiring Arcadia’s brands.

With the liquidation of Debenhams, the 12,000 jobs will gradually disappear unless administrators can secure deals for parts of the business during the winding-up process. Reports suggest that restructuring specialist Hilco will start clearance sales in stores from Wednesday.

Geoff Rowley, joint administrator of Debenhams, stated that every effort was made to secure the company’s future. However, the challenging economic climate and uncertainties in the UK retail industry made it impossible to reach a viable deal.

The closure of Debenhams will not only have a significant impact on jobs but also on UK shopping centers and high streets. The company operates large stores, including its flagship store on Oxford Street. This unfortunate news follows the recent administration filing of Arcadia, putting an additional 13,000 jobs at risk. The fashion and beauty sector has been hit hard this week, with devastating consequences for retail employment.

Although administrators are still searching for buyers, there is little optimism at this point. The future remains uncertain for Debenhams, and the retail industry as a whole continues to face immense challenges.

Useful links:
BBC: Debenhams to close stores with 12,000 jobs lost
Financial Times: Debenhams to close after JD Sports ends rescue talks