Debenhams has named 22 shops that can shut subsequent 12 months as a part of a plan to show round its fortunes that can ultimately see 50 branches shut.
The division retailer chain mentioned on Friday that 1,200 staff could be affected by the primary part of closures.
Debenhams was taken over by its lenders this month after being put into administration. The brand new homeowners embrace Barclays and Financial institution of Eire, in addition to US funding corporations.
It first put ahead proposals in October to close 50 shops over three years because it bids to chop prices. Extra detailed plans have now been formally laid out and shall be put to collectors, 75 per cent of whom should approve earlier than they will go forward.
Terry Duddy, Debenhams govt chairman mentioned: “Debenhams has a transparent technique and a vivid future, however to ensure that the enterprise to prosper, we have to restructure the group’s retailer portfolio and its stability sheet, which aren’t acceptable for at this time’s a lot modified retail atmosphere,”
“Our precedence is to save lots of as many shops and as many roles as we are able to, whereas making the enterprise match for the longer term.”
Debenhams has 166 shops throughout the UK, near a 3rd of which is able to shut over the subsequent three years below the proposals.
The 22 closures set to happen subsequent 12 months is not going to happen on at some point, Debenhams mentioned.
The plan has been put ahead below an insolvency course of referred to as a Firm Voluntary Arrangment (CVA). A creditor vote will happen on 9 Could.
KPMG, which is dealing with the CVA, mentioned consultations had already taken place with key collectors with additional talks deliberate to make sure the total particulars of the proposal are understood.
Suppliers will proceed to be paid “on time and in full, and phrases of employment should not impacted”, KPMG mentioned.
A key a part of rescue plans for the retailer is to slash its hire invoice by closing shops and renegotiating leases with landlords.
Leases shall be retained at present rents for 39 shops, with the 22 shops earmarked for closure searching for hire reductions of 50 per cent till subsequent 12 months. The remaining shops pays 25 to 50 per cent much less hire below the plans.
Excessive prices and huge money owed have made it tough for Debenhams to speculate because it makes an attempt to take care of the risk posed by altering shopper habits and the rise of on-line giants like Amazon.
He had confronted fierce assaults from Sports activities Direct founder Mike Ashley who was searching for to take over at Debenhams and described the administration as a “nationwide scandal”.
Mr Ashley’s firm owned a 30 per cent stake in Debenhams however all shareholders have been worn out as a part of the administration course of.
The shops to shut in 2020:
- Birmingham Fort
- Nice Yarmouth
- Welwyn Backyard Metropolis