10,000 jobs at risk as Debenhams plans to close dozens of stores
Retail giant Debenhams could cut about 10,000 jobs as part of an attempt to keep the company afloat amid plunging profits.
It is believed the struggling department store has earmarked as many as 90 high street stores for closure as part of the rescue plan.
Debenhams had already announced plans to close 50 of its 165 stores in the UK and Ireland. But the firm has reportedly selected another 30 to 40 stores that could be closed in a bid to turn around the company’s fortunes.
It opened its flagship 93,000 sqft store in Wolverhampton in October 2017, 150 jobs. It also has branches in Telford, Merry Hill, Kidderminster, Lichfield and at the Bullring in Birmingham – but it has not said which are under threat.
In October the chain reported losses of £491.5 million, the largest in its history, and has seen its share price plunge almost 90 per cent in the last year.
It is understood to be considering all options as it battles falling numbers of shoppers, a large rent bill and intensifying online competition.
A group of the company’s lenders hired FTI Consulting last week to advise on restructuring Debenhams to ensure they see as much as possible of their money returned.
That came a day before Sports Direct boss Mike Ashley, who has a 30 per cent stake in Debenhams, spearheaded a dramatic boardroom coup, ousting chairman Ian Cheshire and chief executive Sergio Bucher.
Mr Bucher remains in the chief executive role but no longer has a seat on the board after Mr Ashley and another shareholder, Landmark capital, voted against his re-appointment.
The company said it is in the "best interests of Debenhams plc that the executive team remains fully focused on delivery of the plan".
Mr Bucher is expected to put forward formal turnaround proposals to lenders in the coming weeks but investors are showing few signs of confidence in Debenhams’ prospects.
Shares fell a further three per cent on Monday morning to a record low of just 3.79p, down from 195p when Debenhams floated on the stock market in 2006.
Back then the chain was valued at £1.7 billion; now it is worth £83 million. Like-for-like sales dropped 3.4 per cent in the six weeks to January 5.
Debenhams is going through a key time as it needs to renegotiate leases and debts soon as part of a restructuring.
It is likely to want to complete that before the next quarterly rents are due at the end of March, or face a more painful restructuring that could involve a partial insolvency, known as a CVA.