Beleaguered British department store chain Debenhams finally has a new owner, but the 242-year-old business is not expected to operate in the same manner as it has for the last two centuries.
Britain’s fast fashion retailer Boohoo, founded by Mahmud Kamani and Carol Kane, saw off competition from the US’ Authentic Brands and Mike Ashley’s Frasers Group to acquire the global rights for the high street staple.
The deal, which set the beauty e-tailer back £55m, will allow Debenhams to keep its name and operations across e-commerce, but its 100 plus stores, the heart of the department store chain, will be permanently shuttered, offering another blow to Britain’s failing high street and resulting in significant job losses for its 12,000 workers.
Debenhams already announced the loss of more than 300 jobs earlier this month due to the closure of six outlets, including its Oxford Street store.
Geoff Rowley, Joint Administrator and Partner, FRP Advisory, said it was regrettable that the sale would not secure all jobs for its workers.
“We are pleased to have secured the future for this great brand, and to have created an opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic,” he said.
“I expect that the agreement with Boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding down period.
“We are very grateful that they have worked tirelessly through this very challenging period and will continue to support the closing down sale.
“I’d also like to thank the management team, who have worked very hard throughout to protect the business and support us in delivering the best outcome for stakeholders.”
The liquidation process of Debenhams will continue in store once non-essential retail can reopen after the Covid-19 lockdown; once complete, the website will be mobilised and operated by Boohoo.
Debenhams was one of the first retailers to be engulfed by the coronavirus pandemic and entered ‘light touch’ administration shortly after the first UK-wide lockdown was announced in April last year.
Following its downhill spiral as the outbreak of Covid-19 lengthened store closures, Debenhams confirmed it was up for sale in the summer and has been waiting on the shelf for a buyer ever since.
The collapse of Sir Philip Green’s Arcadia group in November disrupted a potential takeover from Peter Cowgill’s JD Sports.
'Bittersweet sale'
Analysis:
By Becky Bargh
Senior News and Social Media Reporter
The decision for Boohoo to buyout Debenhams is bittersweet.
Stakeholders can breathe a sigh of relief that its operations will not be terminated for good, and that the jobs of some 12,000 employees will be saved, but the loss of stores is yet another blow for the high street as buying online becomes customary.
Year-on-year footfall across retail fell by more than 40% in 2020, with high street shops being the worst hit, according to the British Retail Consortium, with a reduction of 50% in in-store shopping.
This in turn could have a knock on effect for beauty brands seeking new consumers as research by e-commerce platform Nosto found more than 60% of shoppers were unlikely to buy products from new brands online.
However, a survey by Cosmetics Business found 65% of customers had been turning to social media to purchase cosmetics.
Respondents also said they would be more likely to visit a brand’s social media platforms before its online store with 65% more confident in reviews on social sites than brand’s websites.
