All 124 of Debenhams’ stores are set to close, after last ditch attempts to save the former high street giant fell through.
Remarkably, the business is 242 years old, but even something that has stood the test of so much time, with the World Wars and health crises of two and a half centuries, couldn’t stand up in the face of the biggest pandemic the world can remember.
Here’s why, or at least, what the experts think…
It will come as little comfort to the thousands of jobless ex employees, but retail experts believe that the Debenhams brand simply stopped being relevant to a lot of people.
A similar problem was faced and overcome by rivals M&S. The lessons learnt then were clearly missed by Debenhams and they’re now paying the price.
On to point number two.
At #TeamCES, we’re regularly pointing out the burden that business rates can have on companies, and it seems that even giants like Debenhams have been finding that out the hard way.
In an age where so much shopping is done online, the presence of Debenhams stores the length and breadth of the country meant that their overheads were astronomical, and let’s face it, astronomical overheads and a forced period of closure thanks to coronavirus are not a good mix...
...not forgetting the wages of all those staff and the maintenance or modernisation of their numerous stores.
The third and final reason behind its failure to survive, has to be with the financial management of the company, from top to bottom.
Debenhams recently entered into a 35 year contract, tying it to its stores with an average 2.5% increase in rent, year on year. Needless to say, this became untenable and the administrators came in during 2019, halving the rent bill via a Company Voluntary Agreement.
Stores were earmarked for closure, staff readied for redundancies, but some hope flickered on the horizon, even as the shareholders skipped away with whatever they could skip away with.
Sadly, the only thing that’s skipping now is the hardware and signage in the closed stores.
(Skipping as in going into the skip. You got that, right?)
Another one bites the dust then...
...our thoughts are with the employees affected, and their families.
As always, it’s the little guys that seem to suffer the most.