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December 2, 2020

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Collapse of 2 retailers puts 25,000 jobs at risk in UK

Debenhams and Topshop-owner Arcadia, two of Britain’s biggest clothing retailers, stood on the brink of collapse yesterday following coronavirus fallout and fierce online competition, risking the loss of 25,000 jobs.

British department store chain Debenhams said it was set to close for business save for an unlikely rescue, meaning around 12,000 jobs were set to go.

The business, which had been struggling long before the pandemic, made its announcement after British clothing retailer Arcadia fell into administration late on Monday, putting at risk a further 13,000 roles.

The news comes on the eve of England exiting a second lockdown which has battered in particular the nation’s retail and hospitality sectors.

Debenhams, whose history dates back to the late 18th century, said in a statement that it would continue to trade through its 124 United Kingdom stores and online to clear stock after retailer JD Sports pulled out of rescue talks.

“On conclusion of this process, if no alternative offers have been received, the UK operations will close,” it added.

Debenhams, which has already been shedding thousands of jobs ahead of the pandemic, currently employs around 12,000 staff — mostly being paid by the government under its furlough scheme.

“All reasonable steps were taken to complete a transaction that would secure the future of Debenhams,” said Geoff Rowley, one of the administrators for the group.

“However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.”

Debenhams collapse comes as the future of Arcadia hangs by a thread.

Arcadia, which owns a number of brands, including Topman, Evans and Wallis, blamed its tumbling into administration largely on coronavirus fallout. However like Debenhams, Arcadia has struggled to adapt from a bricks-and-mortar business into a leading online firm.

Senior government minister Michael Gove yesterday queried the nature of Arcadia’s collapse. “The Arcadia story is a tragic one, I’m not going to criticize any individual but there’s been a lot of reporting that points out some of the missteps by the management there,” he told Sky News.




 

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