Posted on Friday 26 April 2019 by Ulster Business

DEB

Debenhams has launched its cost-saving plans as it reveals it will push forward with the closure of 22 of its stores next year, it has emerged.

The struggling chain has entered into a company voluntary arrangement (CVA). It follows a pre-pack administration for the high street business.

Five Northern Ireland Debenhams stores are continuing to trade, but it has confirmed 22 other stores will shut, outside Northern Ireland. It’s thought more than 1,000 jobs could be at risk.

Debenhams is the anchor tenant at five shopping centres in Northern Ireland, including Newry’s Quays Shopping Centre, Ballymena’s Fairhill, Belfast’s CastleCourt, Craigavon’s Rushmere and Londonderry’s Foyleside.

The firm’s earlier administration angered shareholder Mike Ashley, owner of Sports Direct, who has called for the process to be reversed. The administration wipes out the stakes held by Sports Direct and all other shareholders.

The stores that are due to close are: Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton.

Northern Ireland Retail Consortium, director Aodhán Connolly, says "rising costs, a sluggish economy, and changing shopping habits are making life incredibly hard for the industry".

"Those pressures are being exacerbated by ever-increasing public policy costs which are making it more expensive to employ workers and operate from physical premises. These factors will lead to a very different retail industry over the next few years.

"The challenges department stores face are a microcosm of the immense changes affecting the retail industry. As more consumers shop on-line, there is a challenge to encourage shoppers into stores, and then to get them to spend when they are there. One of the big trends we are seeing is retailers innovating to try and create a number of reasons for customers to visit the store. That can be through offering food and drink, different services, and by investing in customer service. The big advantage a physical retailer has is those trained helpful colleagues who can provide detailed guidance on products to help customers.

"It’s notable those retailers who have invested in evolving from purely physical retail to a multi-channel offering are those who are in the strongest position. Many of the larger stores are particularly affected by government policy which has consistently made operating from property more expensive. With margins so tight, that tax burden is making life difficult for high street retailers."

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