Debenhams begins winding down eight stores in Wales after rescue talks collapse
Debenhams has started winding down its eight Welsh stores after rescue talks collapsed.
The 242-year-old department store chain, which has stores in Wrexham, Llandudno and Bangor, Cardiff, Newport, Swansea, Llanelli, and Carmarthen says it will continue to trade through its stores and online to clear its current and contracted stocks.
The company, which has 124 stores and 14,000 staff throughout the UK, had been in rescue talks with JD Sports, but administrators have started the liquidation process after they collapsed.
Helen Mary Jones MS, Plaid Cymru Shadow Minister for the Economy and Tackling Poverty said: “The announcement of job losses at Arcadia Group stores and Debenhams will be devastating news for those working in their shops and there will be disappointment amongst their loyal customers.
“I know Debenhams is seen as an anchor shop for many communities in Wales so the impact will be felt on our high streets across the country.
“The failure of the owners of the businesses in the Arcadia Group to properly understand retail business and the long term failure to invest has played as much of a part in this crisis as the very difficult trading circumstances.
“As the Welsh Governance Centre has identified non-food retail has been one of the sectors of the economy hardest hit, and often it is women who work in this sector.
“Sectors whose activities involve social contact – such as non-critical retail, hospitality, and restaurants – have been completely shut down, and temporary or permanent job losses here have been concentrated among low-paid service workers.
“Welsh Government must provide what support they can for attempts to save some of these businesses and some of these jobs, and ensure that comprehensive re-training and job search support is available for all those effected in Wales whose jobs cannot be saved.”
In statement, the company said: “On conclusion of this process, if no alternative offers have been received, the UK operations will close.”
According to Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.
“However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.
“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.
“We are very grateful for the efforts of the management team and staff who have worked so hard throughout the most difficult of circumstances to keep the business trading.”
JD Sports confirmed it pulled out of talks about a possible rescue of Debenhams following the collapse of Arcadia, which owns the Topshop and Topman brands, as well as Dorothy Perkins, Wallis, Miss Selfridge, Evans, Burton and Outfit.
JD Sports was the last remaining bidder for Debenhams, which has been in administration since April.
In a brief statement to the London Stock Exchange, the company said: “JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”
It is believed that the collapse of the deal is partly linked to the administration of Arcadia, because it is the biggest operator of concessions in Debenhams stores.
Arcadia went insolvent on Monday evening, and this has cast a shadow over its own 13,000 workers and 444 stores.
A spokesman for the retailer said in August: “Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.
“As a result, and as previously stated, the administrators of Debenhams Retail Ltd have initiated a process to assess ways for the business to exit its protective administration.
“The administrators have appointed advisers to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors), or a sale to a third party.”