Takeover of Tayside and Fife-based retailer could bring store closures and job losses

By Rob McLaren

November 25 2020, 11:31am

A woman shops in a near deserted Debenhams store

Up to 60 shops of a fashion chain could close next year under takeover plans.

Debenhams has been in a protected administration since April and has been seeking a buyer since the summer.

It has emerged that JD Sports is in advanced talks to buy the fashion chain, which operates from the Overgate Shopping Centre in Dundee, Perth’s High Street and Kingsgate Shopping Centre in Fife.

Jobs at risk

According to reports, JD is thought to be mainly interested in the Debenhams website and may only take on half of the group’s 124 outlets.

The possible closures would put thousands of jobs at risk in the group, which employs more than 12,000 staff.

Debenhams in the Overgate Shoping Centre in Dundee.

While the takeover deal could be announced next month, any decisions on store closures is unlikely to come until after the festive period.

Sport Direct founder Mike Ashley also made an offer for the company but it fell short of its owners’ hopes.

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 also fell into administration last Spring at which point it launched a company voluntary arrangement (CVA) to secure agreement for store closures and rent cuts.

Then in April this year, it hired administrators from FRP Advisory in a protective measure against creditors demanding their money.

It has shed around 4,000 jobs and closed 18 stores since the start of lockdown.

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.