Due to increased annual loss Debenhams have decided to close 50 stores, this leaves about 4,000 jobs of their 27,000 (UK) employees at risk.
The department store has lost almost £500 million in the last year, the closure of the 50 stores will be an act to try and save the company. The closures are set to close in the next three to five years as they figure out which stores will be losing their place on the high street.
The company opened in 1778, they sold expensive fabrics and accessories in London’s West End. In 1950’s Debenhams became the largest department store in the UK, they owned 84 companies and 110 outlets. Earlier this year, profits were falling from £87.8 million to £13.5 million in 26 weeks! Debenhams has 116 branches which they previously decided to close 10 but the company has put the number up to 50 for desperate measures.
Department stores have become expensive to run due to rent prices increasing and the fact that online shopping is seen as an easier way to shop. One in every £5 at Debenhams is spent via the internet, therefore a large part of their market is online. Many high street stores are closing due to the online market which is making it hard to remain open stores with little customers shopping instore.
Debenhams has a debt amount of £321 million to tackle hence their plans undergo a revamp to help attract more business to save the company; they are introducing new ‘experiences’ including beauty treatments and prosecco bars.
“It has been a tough year for retail in 2018 and our performance reflects that” said Serigo Butcher, chief executive. Mr Butcher moved to Debenhams from Amazon two years ago and states that the closure of stores was a “tough decision” for the company.
Debenhams has issued three profit warnings this year and are selling assets to help the finances. The companies share price has divided by 75% in the past year, the entire business is now valued at £105 million and investors fear that it could go down the same route as House of Fraser.
