Debenhams special report: The decline of department stores
Department stores used to be seen as the main attraction on many high streets – but it appears these days shoppers appear increasingly able to resist their charms.
Previously seen as innovative, stocking a wide ranges of goods, giants such as Debenhams have been hit by a lack of investment and online shopping in recent years.
Debenhams, whose only Shropshire store opened in Telford Shopping Centre in 1981, is planning to shut up to 50 stores as profits fall.
It follows similar struggles encountered by BHS which spectacularly collapsed in 2016, putting 11,000 people out of work.
And House of Fraser has announced it intends to close 31 shops, including in Shrewsbury and affecting 6,000 jobs, as part of a rescue deal led by Mike Ashley's Sports Direct.
Problems with the stores have come amid a general slowdown on the high street linked to weaker consumer confidence, online competition and rising overheads such as a higher minimum wage.
The closure of department stores and those other large-format chains has also raised problems for landlords and local authorities. Large sites are hard to let and when they lie empty for long periods that can dent the appeal of high streets and shopping centres for consumers.
The future of Telford's Debenhams store is unknown as the retailer remains tight-lipped about which stores it plans to close.
Telford & Wrekin Council 'will do everything it can' to help
But Telford & Wrekin Council has said it will do everything it can to ensure the town keeps one of its iconic department stores.
Councillor Shirley Reynolds, Telford & Wrekin Council’s cabinet member for employment, said: “It is no secret that these are challenging times for the retail sector and we are aware of the announcement that Debenhams plans to shut up to 50 stores.
“While they have not revealed which stores are at risk, we are obviously concerned that the store in Telford Shopping Centre could be one of them and we will do all we can to help.
“This will include working with the shopping centre management to do everything we can to lobby to keep it and also offering as much support as we can for staff whose jobs might be affected.
Timeline:
“We have already successfully fought to keep Telford’s House of Fraser store and the shopping centre is substantially investing in the future of retail in the borough with the creation of the new Fashion Quarter and the opening of new Aldi and B&M stores.”
Telford shopping centre manager Glynn Morrow said: “Our £55 million redevelopment programme reflects our confidence in the Telford centre as well as the confidence of major high street fashion retailers who continue to increase the size of their offer.
"Debenhams may have weaker locations in their portfolio of stores but given the strength of catchment, footfall and spend In the Telford centre, we believe Debenhams will continue to trade.”
Laith Khalaf, senior analyst at financial service firm Hargreaves Lansdown, said: "Debenhams’ decision to close 50 stores reflects the new harsh economic reality on the UK high street.
"This unfortunately spells job losses in the sector. There have been mumblings that the Chancellor may seek to redress the balance between high street and internet sales in the forthcoming Budget, though this seems like a rather large and rubbery item for Philip Hammond to get his teeth into, when he’s got plenty of other problems to chew over.
"Consumers are increasingly spending their money on experiences rather than stuff, and Debenhams is using some of its space to capitalise on that trend, with gyms and food outlets being opened in department stores. The retailer is also investing in improved customer service, which is vitally important as this is something digital-only players can’t replicate."
