Debenhams ‘to shut 20 stores this year’ putting 1,600 jobs at risk

The restructuring plan by the struggling high street giant, which has 166 shops in the UK and Ireland, would put up to 1,600 jobs at risk.

The closures are being fast-tracked as the retail stalwart seeks a company voluntary agreement (CVA), which is when a business enters into a deal with its creditors about the debts it owes to avoid administration and collapse.

The process – which allows businesses to reduce rents and close shops – is expected to launch in late March.

But the retailer refused to confirm or deny the reports when asked by The Sun, and it also wouldn't tell us which stores have been earmarked for closure.

A source told The Sunday Times: "[Debenhams has] been targeted pretty hard by the bondholders and things are moving quickly now."

Which shops did we lose from the high street in 2018?

  • Asda: the supermarket began consulting with staff over potential job losses last year which could total almost 2,500.
  • Coast: collapsed into administration in October 2018, putting 300 jobs at risk. 24 standalone stores have been closed, while Karen Millen is understood to have bought the group's brand and website, saving around 600 roles.
  • Evans Cycles: up to 50 per cent of its locations will also close, leading to around 650 job cuts.
  • Gaucho: the restaurant group prepared to file for administration in July 2018 facing the loss of 1,500 jobs. The Argentinian restaurant had been in talks with potential buyers since May 2018.
  • House of Fraser: announced in early August that 31 of its 59 stores would be closing by January 2019. This meant 2,000 jobs were at risk – along with over 4,000 of its brands and concessions. It's now been confirmed that Sports Direct owner Mike Ashley has bought the company.
  • Ikea: The Swedish furniture store unveiled plans to cut 350 UK jobs over the next two years as part of a global transformation plan. But it will also add 500 new jobs in spring when the new Greenwich store opens.
  • Laura Ashley: the retail chain is expected to close around 40 stores under its new chairman.
  • New Look: is looking at plans to close 60 stores in the UK, with its owners considering a possible Company Voluntary Arrangement (CVA), which will allow it to restructure its business and pay-off its debts.
  • Pets At Home: the pet chain is likely to cut some jobs next year, having earmarked 30 vet practices at its stores for closure.
  • Prezzo:  also announced plans to close 100 restaurants putting hundreds of jobs at risk.
  • Toys R Us: went into administration earlier this year. The company, for many years a household name in retailing, faced the loss of 3,000 jobs.

The chain is being crippled by sky-high rent bills of £290million every year. That compares to the business's statutory annual loss of £491.5million in the year to September 2018.

Fast-tracking of shop closures comes after the chain announced in October that 50 would shut over the next three to five years, putting 4,000 jobs at risk.

The number shot up to 90 shops last month – more than half of the chain's stores in the UK, which could put up to 10,000 jobs at risk.

Now, it's expected that the first 20 will close by the end of 2019.

The retailer, which employs 26,000 people, has previously said there are 20 stores which are uninvestable, but it has not yet revealed which these are.

The chain has previously said that the 20 outlets are currently profitable, but it does not believe they will deliver further return on investment.

In the run up to Christmas, high street stores, including Debenhams, were forced to slash prices by as much as 70 per cent in an attempt to drive footfall.

Debenhams reported one of the worst Christmas results on the high street. It said that like-for-like sales in the 18 weeks to January 5 fell by 5.7 per cent.

Its boss, Sergio Bucher, who is remaining as chief executive but will no longer sit on the board, said he wants to have "fewer but better" stores from now on.

He told BBC Radio 4's Today programme: "I think it's no surprise that customers have shifted online, they buy less in store, they buy more online."

He added: "We want to have fewer but better stores with a better shopping experience, we want to grow our online business and we want the whole of the organisation to be more profitable.

"This is a five-year programme."

Debenhams' largest shareholder, billionaire Mike Ashley, has said he would like to take control of the struggling chain and merge it with House of Fraser.

The mogul, who has a 29 per cent stake in the chain, offered the company a £40million loan that would have allowed Mr Ashley to take control of the chain.

But the offer was rebuffed, according to sources.

In October, the retailer said it was set to close a third of stores under an emergency plan to save £100million.

It has already closed two out of the original 10 earmarked for closure last January.

Debenhams’ new store has a gin bar, as the retailer tries to survive on the struggling high street.

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