Business World

Friday 22 February 2019

Fears for Irish stores as Debenhams unveils shop closure plans putting 4,000 jobs at risk

  • Debenhams suffered a €556m loss in latest financial report, the biggest loss in its history
  • Not known if Irish stores, and related employees, impacted as list of stores undisclosed
Picture: (Peter Byrne/PA)
Picture: (Peter Byrne/PA)
Louise Kelly

Louise Kelly

Debenhams has unveiled plans to axe up to 50 of the struggling department store chain's shops, putting around 4,000 jobs at risk.

The closures are expected to take place over a three to five year period and the announcement comes alongside a dismal financial report, posting the biggest loss in its history.

The chain's Irish business exited examinership in 2016, having entered the protective process after arguing that high rents at its Irish outlets were making its business here unsustainable.

Debenhams has 11 outlets in Ireland, most of which it acquired from Roches Stores in 2006.

A spokesperson for the group said that the 50 stores that have been identified account for under 15pc of total sales.

"[These] are currently profitable, but where we do not see a long term future and which we intend to exit over the next three to five years".

Debenhams are not disclosing a list of these stores, so it is unknown if any Irish stores, and related employees, will be impacted.

In the year to September 1, the retailer suffered a £491.5m (€556m) loss, attributed to exceptional write-downs of £512.4m, primarily relating to store and lease provisions, IT costs and impairment charges.

This drastic swing compares to a £59m profit in 2017.

Chief executive Sergio Bucher said the performance reflects "a tough year for retail in 2018".

"We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging. We are taking tough decisions on stores where financial performance is likely to deteriorate over time."

A raft of retailers recently have embarked on store closures programmes, including New Look, Carpetright and Mothercare.

Furthermore, Debenhams is also the subject of takeover talk, with speculation building that Mike Ashley is set to merge it with his newly-acquired House of Fraser.

Mr Ashley owns just under 30pc of Debenhams, close to the threshold at which he must launch an official takeover bid.

Additional reporting from PA

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