12,000 jobs at risk as Debenhams 'winds down' operations after rescue talks collapse

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JD Sports has pulled out of rescue talks for troubled department store chain Debenhams, putting 12,000 jobs at risk.

It was the last remaining bidder for Debenhams, which has been in administration since April.

Debenhams is now to start a liquidation process.

The department store is seen as the anchor store in Preston's Fishergate Centre and at Blackpool's Houndshill centre.

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Debenhams PrestonDebenhams Preston
Debenhams Preston

The latest news will increase anxiety among scores of Lancashire staff.

Both sites have so far been spared after the retailer named a number of branches that it would shut permanently earlier this year.

Mark Whittle, manager of Preston City Centre Business Improvement District, said: "We're really disappointed to hear that Debenhams faces a national closure, unless the administrators can agree a late deal for all or part of the business.

"Debenhams, here in Preston, has been a constant of our high street for many years, serving and employing many local people.

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Debenhams BlackpoolDebenhams Blackpool
Debenhams Blackpool

"The pandemic seems to have unfortunately hindered the recovery of the chain, as it has with many businesses.

"We sincerely hope that a rescue deal can be achieved and that Debenhams, and its team members, are given a lifeline."

Coun Matthew Brown, leader of Preston City Council, said: “We are disappointed to hear today’s news about the pending closure of Debenhams’ stores – Debenhams has been a well-loved brand and employer in our city centre for a long time.

"This news highlights just how difficult the past number of months have been, and continue to be, for many of our residents and businesses.

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"I hope government will consider supporting the employees affected over the next few months and in the longer term we must look at encouraging more diverse forms of ownership on our high street so businesses are not threatened by a short term and risk taking culture."

The 242-year-old department store chain said its administrators have “regretfully” decided to start winding down operations while continuing to seek offers “for all or parts of the business”.

Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.

“On conclusion of this process, if no alternative offers have been received, the UK operations will close,” the company said in statement.

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Debenhams has already cut 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.

It is understood that the collapse of the deal is partly linked to the administration of Arcadia, which is the biggest operator of concessions in Debenhams stores.

Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.

Retail trade union Usdaw is seeking urgent meetings with Debenhams’ administrators and urges them to treat staff with fairness and dignity.

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Paddy Lillis, Usdaw General Secretary, said: “It is devastating news for our high streets that Debenhams’ administrators have announced a closure programme.

"Throughout Debenhams’ difficulties the company and then administrators have refused to engage with Usdaw, the staff are being treated appallingly and we don’t believe the law has been complied with in the past.

“Over 200,000 retail job losses and 20,000 store closures this year are absolutely devastating and lay bare the scale of the challenge the industry faces. Each one of those job losses is a personal tragedy for the individual worker and store closures are scarring our high streets and communities.

“What retail needs is a joined up strategy of unions, employers and government working together to develop a recovery plan."

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