Debenhams has announced plans to close 50 stores, putting over 3500 jobs at risk.
As it stands, Debenhams has 166 branches across the UK. With the business previously confirming plans to close 10 stores however they amended this and added an additional 40 stores to the list. After losing over £400 million this year compared to a £59 million profit the year before.
Closing over 30% of their stores within the UK in a bid to turn around the business seems like last resort. This decision clearly was not easy for the company to make.
Boss Sergio Bucher said the company was ‘taking tough decisions’ on stores which were currently contributing positively to the business, but where financial performance was likely to ‘deteriorate over time.’
It has been reported that Debenhams was working with a large restructuring firm. This would have seen the retailer entering a Company Voluntary Arrangement to shed sites and gain some rent reductions. Although, CEO Ron Marshall spoke about the rumours and explained that they have no intent for a CVA.
The news comes after rumours that other high street chains are failing including companies like Toy’s R Us. The rise of the internet has clearly been too much for some high street businesses to deal with. Not all retailers have evolved. How can you compete? You must be willing to take risks by using multi-channel marketing. SEO, PPC and Social Media must be done to help improve sales. Working with niche marketplaces/industries will help you stand out. It is important to give people a reason to shop on your site, be different and allow customers to get a unique experience when shopping with your business.