Does Debenhams collapse spell the end for the British department store? - Mark Casci
The Manchester-based online fashion retail giant has confirmed the purchase of Debenhams for £55m.
While it is clearly good news that the chain has new owners and has been rescued from receivership, the deal is limited and sees Boohoo only take control of the Debenhams brand and website.
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Hide AdAs a result the company’s remaining 118 stores will close for good, with many of its 12,000 employees likely to be lost for good.
Once a titan of the high street, the 242-year-old firm will leave huge gaps in the nation’s high streets.
It is hard to think of a town centre or shopping centre without it and my own memories of Debenhams from childhood is of a vast sprawling building, selling all manner of wares and constantly busy.
Alas, this has not been the case for too long for the beleaguered brand which has lurched from one crisis to another in recent years.
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Hide AdThe firm was reporting colossal losses into the hundreds of millions as it struggled to keep pace with modern times.
In reality, the firm had been on borrowed time for some years. Once renowned for the quality of its goods, this reputation had been eroding for some time,
I remember the late great Sir Ken Morrison telling me during one of the times I was lucky enough to interview him that you could tell how good a retailer was by its customer service.
Again, with Debenhams, standards had been slipping for quite some time.
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Hide AdIn 2019 and 2020 administrators were called in. Under-performing shops were closed and jobs were cut. The writing was very much on the wall. In the end, Covid shutdowns put it out of it misery.
So what now for the stores?
The nature of the business of managing department stores demands a large operational footprint. Given the direction of travel for retail, who is likely to wish to take on these considerable burdens? The list of names is worryingly short.
As such our town and city centres are in for a rough ride. Many have yet to get over the collapse of BHS, something which occurred close to five years ago.
When one considers a city like Bradford, whose Broadway shopping centre was very much built around Debenhams, we are looking at a significantly hollowed out retail offering.
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Hide AdThe likelihood is of course that the Bradford store and many others are unlikely to continue as retail outlets, at least not on the scale at which they currently operate. Estate managers are almost certainly going to begin carving them up into smaller retail units.
Some may be scrapped and demolished. Others could potentially see a bright future as community resources or business incubation units.
What they definitely will not serve as will be a one-stop shop where one can pick up clothing, beauty products and household items, all under one roof.
Those days are gone and although House of Fraser continues to perform well under the ownership of Mike Ashley, one wonders for how long such enterprises will be viable.
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Hide AdFor Boohoo, the sale continues its recent successful track record of buying well-known high street brands out of administration and turning them into online-only operations, having done so for the likes of Oasis, Coast and Karen Millen.
Indeed, its management even alluded this week that it may be thinking of taking on the might of Amazon, as it seeks to create the UK’s largest marketplace across fashion, beauty, sport and homeware.
Were this to happen there is a potential upside for Yorkshire’s economy, given its advanced logistics offering.
This will be crumbs of comfort, however, to the thousands of staff whose jobs are set to be axed and the town centre managers already wrestling with the catastrophe of lockdown.
One fears this will not be the last chain Boohoo buys out of administration.
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