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Job losses: Shops and workforce not part of rescue deal for Debenhams

The Overgate Shopping Centre in Dundee.
The Overgate Shopping Centre in Dundee.

All Debenhams shops will close and workers will lose their jobs as part of a rescue deal.

Online fashion retailer Boohoo has bought the Debenhams brand and website from administration for £55 million.

But while the department store’s name will survive all the company’s remaining 118 stores close for good.

It means that 12,000 jobs will be lost UK wide.

Debenhams. Dundee.

Debenhams operates from the Overgate Shopping Centre in Dundee, Perth’s High Street and Kingsgate Shopping Centre in Fife.

The Overgate today expressed its sadness and said it was in talks with other retailers.

Debenhams website to continue

The deal will see Debenhams products sold by Boohoo from early next year.

This will allow enough time for liquidators to continue closing the retailer’s sites once they are allowed to reopen after Covid-19 lockdown restrictions are lifted.

Debenhams’ own fashion brands will also be absorbed into Boohoo’s current portfolio and sold via the Debenhams website.

Debenhams in the Overgate Shoping Centre in Dundee.

Its executive chairman, Mahmud Kamani, said: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK’s largest marketplace.

“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.”

Boohoo said the deal represents a “fantastic opportunity” to target new customers and launch into the beauty, sports and homewares market for the first time.

Debenhams, Perth High Street

Boohoo has already bought a number of High Street brands out of administration.

It snapped up Oasis, Coast and Karen Millen, but not the associated stores.

Boohoo chief executive John Lyttle said: “The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.”

Does not safeguard jobs

The administration process for Debenhams started in December.

Geoff Rowley, joint administrator for Debenhams and partner of FRP Advisory, said: “We are pleased to have secured the future for this great brand, and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic.

‘Significant blow to retail in Dundee’: Overgate searches for Debenhams replacement

“I expect that the agreement with Boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding-down period.”

Bloodbath on the High Street

Sir Philip Green’s fashion empire Arcadia has also entered administration.

Its plus-size clothing brand Evans became the first in the stable to be bought out of retail giant’s administration process in December. But the deal will not include brick and mortar stores, just the online business.

Several companies are eyeing bids for Arcadia’s Topshop operation, including Asos.

Edinburgh Woollen Mill has come out of administration but some shops are to close.

Oasis and Warehouse wound up its retail business in April, with the loss of 1,800 jobs.

Phase Eight’s Perth store will remain permanently closed. Picture: Kim Cessford.

Quiz in Kirkcaldy, Size? in Dundee and Phase Eight in Perth all closed last year.

Argos also announced its intention to shut all standalone shops.

Meanwhile companies such as Marks & Spencer and River Island have also cut staff.

Earlier this month doubts emerged over the future of Paperchase.

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