Business

Debenhams stores to close for good after starting liquidation process

The Debenhams store at CastleCourt in Belfast.. Picture by Hugh Russell

Debenhams is to start a liquidation process after JD Sports confirmed it had pulled out of a possible rescue deal, putting hundreds of jobs in Northern Ireland at risk.

The 242-year-old department store chain said its administrators have "regretfully" decided to start winding down operations while continuing to seek offers "for all or parts of the business".

It is understood that the collapse of rescue talks were partly linked to the administration of Arcadia Group, which is the biggest operator of concessions in Debenhams stores.

JD Sports had been the last remaining bidder for Debenhams, which has been in administration since April.

Debenhams said it will continue to trade through its UK stores and online to clear its current and contracted stocks.

"On conclusion of this process, if no alternative offers have been received, the UK operations will close," the company said in statement.

Debenhams’ retail operation in the Republic went into liquidation in April. Some 1,400 people were employed across its 11 stores across the border.

Around 700 people are employed across the department store chain’s five outlets in the north: Castlecourt (Belfast), Foyleside (Derry), Rushmere (Craigavon), Fairhill (Ballymena) and The Quays (Newry) are all currently closed under the latest Northern Ireland health regulations.

The stock clearance is expected to begin in earnest once staff return on December 11.

Geoff Rowley, of FRP Advisory, joint administrator to Debenhams, said: "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."

Commenting on the likely closure of Debenhams, Retail NI Chief Executive Glyn Roberts said:

“These few days have been amongst the worst our high streets have ever seen, with Arcadia going into administration and now the closure of Debenhams. Our thoughts are with their staff and families as they face an uncertain financial future so close to Christmas”

“The share scale of the loss of these businesses to our town centres and high streets will be difficult to calculate and sadly we are going to see a lot more independent retailers fall in the next few months”

“My real fear is that we will now see a domino effect of retailer and after retailer closing and that process will be extremely hard to reverse. The Executive now faces a huge challenge ahead to address this emergency and needs to consider a ‘Marshall Plan’ financial package to save our local town centres and high streets”

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