Coronavirus: Debenhams to Close Five Stores After End of Lockout

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Two people wearing masks walk past an onboard Debenhams store in Oxford Street, London

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AFP

Debenhams has confirmed that five more stores will not reopen after the lockout restrictions are lifted.

The department store chain has signed deals with the owners to keep most of its 142 stores open after its second administration.

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

It is understood that the retailer was unable to agree on new terms with the owner of the Hammerson Mall.

The relevant Debenhams stores are located in the arenas of Birmingham, The Oracle in Reading, Centrale in Croydon, Highcross in Leicester and Silverburn in Glasgow.

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

Debenhams said in a statement, “We can confirm that despite our best efforts, we have not been able to agree to terms with Hammerson on our five stores in its malls, and therefore they will not reopen.

“We continue to enter into constructive talks with our owners and have agreed terms on the vast majority of our stores, which we look forward to reopening when government restrictions allow.”

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When Debenhams first collapsed in April of last year, it entered into a voluntary agreement with its owners to cut costs in order to save the business.

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

Debenhams still had 142 stores last month, but was forced to re-appoint directors to protect the business from its creditors because the coronavirus forced it to temporarily close its stores.

He then expedited negotiations with the owners to agree on new terms and conditions, including five months’ rent and leave for service charges.

No more store closings

Debenhams has successfully concluded agreements on 120 stores. But in recent weeks, it has emerged that a number of stores will close permanently once the government has lifted restrictions on non-essential stores.

A total of 15 stores are expected to be closed, including five outlets in Hammerson shopping centers.

The BBC approached Hammerson for comment.

The retailer’s Warrington store had been designated to close, but has now received a last-minute reprieve.

However, the future of five Debenhams department stores in Wales remains uncertain unless the Welsh government reverses a decision to cut corporate rates.

Debenhams is still in discussions with the other seven stores in his estate.

The retailer still trades online “normally” while its stores are closed.

Like many other non-essential retailers, he has laid off the majority of his staff who are paid under the government’s coronavirus retention program, which pays 80% of a worker’s salary up to £ 2,500 per month.

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