After a fraught year of financial crises, successive restructurings and impending closures, Debenhams finally found a buyer. Fast fashion retailer Boohoo has bought the ailing high street retailing brand and its website, but has no interest in its stores.
A deal that sees all Debenhams staff lose their livelihoods
The 12,000 jobs that have been at risk for months have no hope left. Boohoo, in its “transformational deal” has no use for the store chain or its people.
The Debenhams closing down sale began last month, with the group announcing six stores would not reopen after lockdown, including the London Oxford Street flagship.
Its administrators, FRP Advisory, said they had undertaken a “thorough and robust process” to achieve “the best outcome for Debenhams’ stakeholders”. Whether or not those stakeholders include the staff who will be without jobs, is another matter.
“This transaction will allow a new Debenhams-branded business to emerge under strong new ownership, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name,” FRP Advisory said.
Boohoo has already bought a number of High Street brands out of administration, including Oasis, Coast and Karen Millen, but not their associated stores. Boohoo’s executive chairman, Mahmud Kamani, said: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.”
Boohoo said Debenhams was expected to relaunch on Boohoo’s web platform later this year. In the meantime, Debenhams will continue to operate its website for an agreed period.
The BBC’s Business Correspondent Dominic O’Connell said: “While online retailers have been whittling away at their High Street rivals for years, few could have predicted how quickly bricks-and-mortar stalwarts have collapsed. The pandemic has fatally undermined their already parlous finances. Businesses that appeared to have a chance of survival just a year ago have been wiped out and their brands bought by online players.”
“Neither Boohoo or Asos see any value in the Debenhams or Topshop High Street estates. Instead, they will concentrate on development of the brands and the associated customer data. This is bad news for the 19,000-odd people who work in the branches of Debenhams and Topshop, and will leave councils around the country wondering how they will fill town centres that were based on retail.”
Photo credit: Debenhams; Article source: BBC