On 1 December 2020, it was announced that Debenhams is set to close after failing to reach a last-ditch rescue attempt with JD Sports, the last remaining bidder, withdrawing from the process. This means the closure of 124 stores across the UK and the loss of 12,000 jobs. This news comes hours after the news Arcadia has fallen into administration, putting 13,000 jobs at risk.
Debenhams was founded in 1778 and after entering administration for a second time, is now set to enter liquidation. The retailer has already cut 6,500 jobs since May in an effort to stay afloat. Debenhams will now start liquidating its UK stores. Debenhams will continue to trade both in store and online as it seeks a buyer to take on part or all of the business. If a suitable offer is not received, Debenhams UK will cease trading and close for good.
Sir Philip Green’s Arcadia Group, which went into insolvency on Monday evening (30 November), will see the closure of 444 UK stores plus 22 overseas, in addition to having already closed 23 Topshop, Dorothy Perkins and Burton stores in 2019, which resulted in the loss of 500 jobs as part of a restructuring move. The Arcadia Group had over 9,000 on furlough due to the COVID-19 crisis, which has had a devastating impact on the retail industry.
The news surrounding both Debenhams and the Arcadia Group is another hammer blow to retail following the collapse of BHS in 2016, the winding up of Toys R Us in 2018, the fall of Thomas Cook in 2019 and shopping centre giant, Intu, which went into administration in 2020. According to the Centre for Retail Research, 140,437 jobs have already been lost in retail this year and the organisation predicts this to rise to 235,000 by the end of December 2020.
As a result of the Arcadia collapse, property owners and other creditors are likely to be hit as well. These creditors include the likes of British Land, Hammerson and Landsec who let stores to Arcadia. The administrators for both Debenhams and the Arcadia Group will now look to sell all or parts of the business but the economic outlook and the growing effects of the COVID-19 pandemic offer a bleak outlook, not just for Debenhams and Arcadia, but the high street as a whole.
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