Debenhams

Closure of Debenhams stores confirmed

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It's been confirmed that Debenhams will close at least 22 stores - including its branch in Stockton.

Creditors have approved the plans to start the restructuring and impose big rent reductions.

The struggling department store chain has what's known as a company voluntary arrangement, a form of insolvency to cut its costs.

Debenhams
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Debenhams creditors back turnaround plan

Debenhams store
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Debenhams' creditors have endorsed a turnaround plan that will see the closure of 50 stores and rent reductions for others.

Landlords, local authorities and others voted to back the proposals made by the retailer's board.

Debenhams Group Holdings said the plan had been approved by "a majority significantly above the required threshold of 75% on each proposal".

Terry Duddy, executive chairman of Debenhams, said: “I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans. We will continue to work to preserve as many stores and jobs as possible through this process. This is a further important step to give us the platform to deliver a turnaround.”

Landlords frustrated over rescue deals

Debenhams window
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Creditors, including landlords vote later on a rescue deal for Debenhams.

Under the Company Voluntary Arrangement (CVA) more than 20 stores will close and landlords will see rents cut.

Adam Coffer is a retail and leisure landlord, but not involved in the Debenhams deal.

"There's been this proliferation of CVA's which have now almost become the go-to method for retailers, that are being advised by consultants that are generating huge fees, as a quick-fix opportunity to really just prolong the agony.

"It dumps all of the burden on the landlords without any consultation," he said.

"Around 90% of CVAs result in full administration anyway," Mr Coffer added.

'Huge relief' for Sunderland as Debenhams in the city escapes closure

Debenhams in Sunderland
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A Sunderland councillor has expressed his relief as Debenhams store in the city was spared closure.

The retailer announced a list of shops closing down in 2020 in an attempt to save the chain.

Debenhams in Stockton in Teeside is one of the 22 stores set to go next year. Around 1,200 members of staff will be affected.

Niall Hodson, Lib Dem councillor for Millfield, said the news of Sunderland not being on the list was a "huge relief".

Niall Hodson, Liberal Democrat councillor for Millfield
Paul Edgeworth

He said: “Debenhams is the only large department store left in Sunderland and is at the heart of our city centre shopping offer.

“If Debenhams had closed it would have been devastating - leaving a huge retail unit empty in the heart of the city centre."

Mr Hodson also pleaded with the council to step in with an action plan.

He said: “For too long, shops have stood empty, the cleanliness and state of the town has got worse and worse - and parking charges have meant people are opting for Newcastle, the Metro Centre, Dalton Park and the Galleries instead.

“Sunderland desperately needs an action plan to improve shops, services and the night time economy in our city centre”.

Debenhams will close 50 shops in total.

The chief financial officer of Debenhams says its 22 store closures is a retail reality.
The chief financial officer of Debenhams, Rachel Osborne, says its 22 store closures is a reality of the UK retail environment.