Retail crisis: Debenhams stores to disappear with Arcadia's high street presence under threat
THE closure of Debenhams’ four remaining stores in the north and the potential loss of the former Arcadia group’s outlets on the high street will have huge implications, a retail chief has warned.
As many as 500 jobs are set to be lost at Debenhams in Belfast, Newry, Ballymena and Craigavon after online fashion retailer Boohoo bought the brand and website for £55 million.
The deal will result in the department chain’s remaining 118 stores closing for good, with most of the12,000 UK workforce set to be lost.
It mirrors Boohoo’s previous deals to buy the Oasis, Coast and Karen Millen brands and turn them into online only operations.
Fellow online retailer Asos has also entered exclusive talks to buy Arcadia’s Topshop, Topman, Miss Selfridge and HIIT brands, with any deal triggering a similar wave of physical store closures.
Retail NI’s chief executive Glyn Roberts said the trend of online companies buying retail brands and ending their physical presence on high streets and retail centres will have huge implications.
“The closure of the four Debenhams stores will be a hammer blow to our already struggling high streets,” said the retail chief.
“We are also concerned that if the Asos talks to buy the Topshop, Topman etc brands and not the stores are successful, then sadly we will see further store closures and job losses.”
Debenhams entered administration for the second time in April 2020, but the former store at Derry’s Foyleside centre is the only survivor from the department chain’s collapse, with Mike Ashley’s Frasers Group stepping in to save around 200 jobs.
The loss of the remaining four anchor departments stores is set to leave major gaping holes in the CastleCourt, Rushmere, Fairhill and Quays shopping centres, with knock-on implications for footfall and surrounding businesses.
Following confirmation of the Boohoo sale, Debenhams was issued a winding-up order at an online hearing in the Insolvency and Companies Court on Monday.
Judge Daniel Schaffer described the company as a "rudderless ship" drifting in an "ocean of insolvency".
Debenhams has already liquidated its operation in the Republic, with the loss of 1,400 jobs across 11 stores.
Liquidators are set to recommence closing down sales in the north once Covid-19 restrictions are lifted. Boohoo expects to be selling Debenhams products by early next year.
The likely loss of Arcadia’s physical presence will represent a further hammer blow to retail centres.
The collapsed group’s Outfit store in Belfast’s Boucher Road is already confirmed for closure this week.
Menarys has also confirmed the closure of three Tempest department stores, which leaned heavily on Arcadia concessions.
Although both Arcadia and Debenhams were in trouble before the Covid-19 pandemic, the economic crisis has accelerated their demise.
They are the most significant of the mounting retail casualties.
Since April, all Eason, Oasis, Warehouse, Cath Kidston and Jaeger stores have permanently closed in the north.
DW Sports closed seven stores in the north in August, while Monsoon Accessorize closed outlets after being bought out of administration last June. Peacocks and Laura Ashley are also closing stores after their respective owners fell into financial crisis last year.
Glyn Roberts said: “The Executive needs to immediately establish the High Streets Taskforce to get down to work, producing a big bold radical new plan for our post-pandemic high streets and town centres.
“While not a silver bullet for all the problems facing our high streets, it would be a step in the right direction in a co-ordinated approach towards recovery and reconstruction," he said.
Retail analyst Richard Hyman has said while the high street isn't dead, he said its future will be look “quite different”.
When it is allowed to wake up properly I think you will see a huge amount of the population go out shopping because it is something people miss.
"But obviously it will be smaller and we continue to see a lot of changes as stores react to what customers want and expect from the experience.
"These companies, like Topman and Debenhams, were always going to fade from the high street but there are plenty like Primark who have been hit by the pandemic but should rebound quickly when they reopen".
Analysts have also stressed that a slump in retail property valuations following the pandemic could provide an opportunity for innovation.
Leisure firms had seen particular growth prior to the pandemic, with large units previously taken by major retailers or department stores becoming trampoline parks and mixed-use venues.