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Debenhams set to close after JD Sports pulls out of rescue talks
1 December 2020, 09:11 | Updated: 1 December 2020, 23:05
Debenhams is set to close after JD Sports pulled out of a potential rescue deal, putting 12,000 jobs at risk.
Debenhams has confirmed that its administrators FRP Advisory will start a wind-down of the business whilst continuing to seek offers for all or parts of the business.
"On conclusion of this process, if no alternative offers have been received, the UK operations will close," the company said in statement.
On Tuesday, shoppers for the retailer were left waiting in a virtual queue as demand overwhelmed the website following a 70 per cent 'fire sale'.
JD Sports pulled out of the potential rescue deal after Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.
12,000 jobs are now at risk at Debenhams, which operates 128 UK stores, many of which are currently closed due to the coronavirus crisis.
The 242-year-old retailer already cut 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.
JD Sports was understood to be the sole entity left in a sale process.
But the sportswear chain was said to be concerned by the collapse on Monday night of Debenhams' biggest supplier, Sir Philip Green's Arcadia Group.
It's understood staff were told this morning, and restructuring firm Hilco, is expected to start going into stores tomorrow to begin clearing stock.
JD Sports' update to the City read: "JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated."
Geoff Rowley of FRP Advisory, joint administrator to Debenhams and partner at FRP, 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."
In a statement on his Twitter, Labour leader Keir Starmer said: "Thousands of Debenhams staff and their families face huge uncertainty this Christmas.
"Retail workers across the country will be worried about the future.
"Our high streets face a defining few months. We must fight to protect good jobs and good businesses."
Paddy Lillis, general secretary at the Usdaw retail union, said: "It is devastating news for our high streets that Debenhams' administrators have announced a closure programme.
"Throughout Debenhams' difficulties the company and then administrators have refused to engage with Usdaw, the staff are being treated appallingly, and we don't believe the law has been complied with in the past.
"Over 200,000 retail job losses and 20,000 store closures this year are absolutely devastating and lay bare the scale of the challenge the industry faces."