Coronavirus: Debenhams to close five stores after lockdown ends

Image source, AFP

Debenhams has confirmed that another five stores will not be re-opening after lockdown restrictions are lifted.

The department store chain has struck deals with landlords to keep most of its 142 stores open, after it fell into administration for the second time.

But five more stores will not reopen when the government lifts coronavirus restrictions on non-essential shops.

It's understood the retailer has been unable to agree new terms with shopping centre owner Hammerson.

The Debenhams stores affected are in the Bullring in Birmingham, The Oracle in Reading, Centrale in Croydon, Highcross in Leicester, and Silverburn in Glasgow.

The BBC understands that around 1,000 jobs will be affected, including concession staff.

Debenhams said in a statement: "We can confirm that despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres, and so they will not be reopening.

"We continue to engage in constructive talks with our landlords and have agreed terms on the vast majority of our stores, which we look forward to reopening when government restrictions allow".

When Debenhams first collapsed in April last year, it agreed a company voluntary arrangement (CVA) with its landlords to cut costs in order to save the business.

Under the agreement, the retailer would close 22 stores in 2020 and 28 stores in 2021.

Last month, Debenhams still had 142 stores but it was forced to appoint administrators again to protect the business from its creditors as coronavirus forced it to temporarily shut its stores.

It then accelerated negotiations with landlords to agree new terms and conditions, including a five month rent and service charge holiday.

More store closures

Debenhams has managed to strike deals on 120 stores. But over the course of the last few weeks, it's emerged a number of stores would close permanently once the government lifts restrictions on non-essential shops.

A total of 15 stores are now set for closure, including the five outlets in Hammerson shopping centres.

The BBC has approached Hammerson for comment.

The retailer's Warrington store had been earmarked to shut but this has now been given a last minute reprieve.

However, the future of five major Debenhams stores in Wales is still in doubt, unless the Welsh government reverses a decision on business rates relief.

Debenhams is still in discussions with the remaining seven stores in its estate.

The retailer is still trading online "normally" while its shops are closed.

Like many other non essential retailers, it has furloughed the majority of its staff who are being paid under the government's coronavirus job retention scheme which pays 80% of a worker's salary up to £2,500 a month.