Debenhams has confirmed it will start a liquidation process to close all its stores after the collapse of takeover talks.
The major fashion retailer operates from the Overgate Shopping Centre in Dundee, Perth’s High Street and Kingsgate Shopping Centre in Fife.
JD Sports pulled out of a takeover bid for Debenhams following the collapse of the Arcadia group on Monday. Arcadia is the biggest concession operator in Debenhams.
JD was the last remaining bidder for Debenhams, which has been in administration since April.
Unless a further bidder emerges, the Debenhams stores will clear their stock and then close.
Liquidation process
The 242-year-old department store chain said its administrators have “regretfully” decided to start its liquidation process, while continuing to seek offers.
Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
“On conclusion of this process, if no alternative offers have been received, the UK operations will close,” the company said in statement.
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.”
Acquisition terminated
In a brief statement to the London Stock Exchange, the company said: “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.”
Debenhams has already cut 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.
Arcadia collapse
Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.
Arcadia brands Dorothy Perkins and Wallis operate within Debenhams in Dundee and Perth. Wallis also operates from Debenhams in Dunfermline.
According to the BBC, Debenhams staff were informed stores would close this morning and Hilco, the restructuring firm which specialises in winding up retailers, will start going into stores tomorrow to begin clearing stock.
Retailer’s struggles
Debenhams appointed Hilco Capital, a firm which specialises in helping to wind down distressed retail businesses in August.
The move came just four days after Debenhams announced it was to axe 2,500 staff across its estate.
At the time a Debenhams spokesperson said the chain was assessing its options and said liquidation was “a contingency plan in the unlikely event all other avenues be exhausted”.
Debenhams signed an agreement to remain in Dundee’s Overgate until at least January 2022 in April.
At the time Overgate centre manager Malcolm Angus expressed his delight that a deal had been made with Debenhams at a time the retailer was considering reducing the size of its store estate.
