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Debenhams: Staff forced to seek jobs amid pandemic as takeover deal signals trouble for Tayside and Fife high streets

Debenhams in Perth.
Debenhams in Perth.

Hopes of a last minute reprieve for Debenhams stores across Tayside and Fife have been shattered, forcing hundreds of staff out of work and prompting grave concerns about the future of the region’s high streets.

Branches in Perth, Dundee and Dunfermline are set to close following a £55 million take-over deal by online retailer Boohoo.

Debenhams stores set to close after takeover talks fail

The sale only covers Debenhams’ brand and website, meaning all 118 UK stores and up to 12,000 jobs are expected to be lost by the end of March.

The 242-year-old chain has been teetering on the brink since early December, when JD Sports pulled out of a takeover which could have rescued the business.

It comes as retail group Fraser Group confirmed iconic Edinburgh department store Jenners will close after 183 years trading, with the loss of 200 jobs.

The shop is shutting down after a dispute between House of Fraser and the building’s current owner Anders Polvsen.

Meanwhile, online retailer Asos is in talks to take on the Topshop, Topman, Miss Selfridge and HIIT brands that were part of Arcadia, the fashion empire assembled by tycoon Philip Green.

However, it is understood Asos is uninterested in operating physical stores, meaning more closures and job losses could be in the pipeline.

Following Monday morning’s sale to Boohoo, Debenhams was issued a winding-up order at an online hearing in the Insolvency and Companies Court.

Judge Daniel Schaffer described the company as a “rudderless ship” drifting in an “ocean of insolvency”.

Debenhams, Perth High Street

Supporting workers is a ‘key priority’ for Perth

It is another hammer blow for the already fragile Perth city centre, which is still reeling from the news of the imminent closure of Lakeland on St Johns Street, which followed the shutdown of neighbouring Beales department store – formerly McEwans – last year.

Deputy First Minister and Perthshire North MSP John Swinney said the store’s closure will have a “significantly negative impact” on the city centre, “whilst forcing local workers to look for new employment in the middle of a pandemic.”

City centre councillor Peter Barrett (Lib Dem) said the sale of Debenhams’ brand and website offered no comfort to the workforce. “Supporting these workers back into employment is now a key priority,” he said.

SNP MP Pete Wishart said: “This is a real blow for the High Street in Perth, as the store is such a major feature.”

He added: “I understand that the last few years have been extremely tough for department store retailers, such as Debenhams and the slump in sales caused by the pandemic appears to be the final straw.”

Perth SNP councillor Andrew Parrott added: “High Street retail was facing difficulties with competition from online outlets before Covid, but the pandemic has simply made the problem much bigger and more urgent.

“In Perth, Perth and Kinross Council will have to seek to play their part in reinvigorating the High Street and more widely I think there has to be consideration of the differing tax burdens on physical and online retail.”

Murdo Fraser, Tory MSP for Mid-Scotland and Fife said it was an anxious time for Debenhams staff and their families. “The loss of Debenhams in Perth’s High Street will be greatly felt,” he said. “Sadly, it is an indication of the changing trends in shopping, where more and more customers are shopping online.”

The new Debenhams building emerging from the scaffolding as work progresses on the Overgate in 1999.

Talks under way in Dundee

The Overgate Shopping Centre in Dundee is now in talks with retailers interested in taking over Debenhams’ space.

Tom Williams, fund manager, Legal & General Investment Management, which owns the Overgate, expressed his disappointment at Monday’s news.

He said: “Overgate is saddened to hear of the imminent closure of the Debenhams store.

“This is a significant blow to the retail provision in Dundee.”

Mr Williams added: “Our thoughts are very much with the dedicated team of staff who have worked so hard throughout these challenging times to deliver great customer service.”

Mr Williams said the shopping centre was already in talks with prospective new tenants.

“Overgate remains committed to delivering alternative occupiers for the Debenhams space as soon as possible,” he added.

Kingsgate Centre, Dunfermline (stock image).

Kingsgate Shopping Centre searching for new tenant

Some of the 50 staff at Debenhams’ Dunfermline store are facing uncertainty for the second time in a year after moving from the Kirkcaldy branch when it closed last January.

Fife Council’s economy spokesperson, Labour councillor Altany Craik, said the announcement was devastating for everyone who worked there.

“They’ll have been on tenterhooks for this announcement,” he said. “It’s a really difficult time for retail and our high streets.

“This isn’t a reflection on Dunfermline, it’s a reflection of the national retail situation.”

Debenhans occupies one of the largest units in the Kingsgate shopping centre and Mr Craik said the council would work very closely with centre managers  to try to find new tenants.

They will also help the store’s concession holders to relocate.

“I really feel for the staff and their families,” he said.

“It’s a hard enough time without having to find a new job during a pandemic.

“We’ll work with them to find the best outcome we possibly can.”

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