Debenhams needs to go through a 45-day consultation process with the employees before closing a store

Debenhams plans to close 50 stores as a result of its record annual loss of almost £500m. This means that no less than 4,000 individuals might lose their jobs.

Sergio Bucher, CEO, told BBC that Debenhams is facing “tough decisions” regarding the poor financial performance of their stores.


Even though the popular brand had more than 19 million customers in the past year, the company is exerting effort to stay relevant in a changing market.


Mr Bucher also stated that the closures will happen over a five-year period. Current employees are experiencing great uncertainty because the retail company has not released any further information about shutting down these 50 stores.


Trade union USDAW told VoL that Debenhams did not make decisions concerning which specific shops are going to close. USDAW also affirmed that “when they do propose to close a store, they will have to go through a minimum 45-day consultation process with the staff”.


So far, Debenhams announced that 50 stores with less than 15% of total sales have been identified. According to the company’s statement, the stores are still profitable, but do not have a “long-term future”.

One of the potential reasons, which led to the biggest financial loss in Debenhams’ history is the shift generated by the customers who prefer to spend money on online websites, rather than visiting the high street.


Another reason might be the imbalance between the rent and the financial performance of some stores. The company’s annual rent bill is approximately £300m, which represents 13% of its annual profit. The rent is considerably higher when compared to other retailers.


Debenhams is not the only department store chain to announce branch closures. Recently, House of Fraser and Marks & Spencer have been dealing with economic difficulties as well.

Words: Catalina Oblu | Subbing: Shruti Tangirala

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