Debenhams is cutting more than 1,000 jobs at its headquarters and in stores as it slims down its team in line with a swathe of store closures and new rules to control the spread of coronavirus.
The redundancies in merchandising, buying, design and other administrative functions at head office, as well as in cafes and other services in stores that will not reopen under social distancing rules, come after the British department store went into administration last month – the second time in a year.
The retailer, which shut its stores temporarily in March under the governments high street lockdown, has confirmed plans to permanently close 17 of its 142 outlets. That includes three in shopping centres owned by the property firm Hammerson, which has signed a deal to bring Next beauty halls into the sites. Debenhams has grabbed back two of five sites originally intended for conversion by Hammerson.
Negotiations with landlords have secured agreement on retaining 120 sites, 90 of which are expected to reopen on 15 June in line with new government rules under which cafes and services involving close contact – such as makeovers and eyebrow threading. The future of an additional five stores hangs in the balance.
Two sites in Wales are also uncertain – despite deals with landlords – after the Welsh government said Debenhams must pay its business rates bill on the properties.
A spokesperson for the retailer said: “Debenhams preparations to reopen the vast majority of its stores from 15 June are well under way following the successful conclusion of lease negotiations on 120 stores.
“In the context of a retail industry undergoing profound change, the management team is working on the future shape of the group, with a view to exiting administration as a going concern. With a leaner and more flexible operating model, Debenhams will have the ability to adapt to what are likely to be fundamental shifts in the future trading environment.”
The majority of staff have been furloughed, although the website has continued to trade.
Like many other retailers, the department store chain, which employed more than 20,000 people before its latest administration, has been badly affected by the coronavirus lockdown.
However, even before that, Debenhams was struggling with a £600m debt pile. The groups poor financial situation resulted in administration in April 2019, which wiped out its shareholders and transferred ownership to a group of financial investors, including the US hedge funds Silver Point and GoldenTree.