Debenhams to close 22 stores in 2020 as lenders warn of 1,200 job losses

Debenhams revealed its store closure plan this morning, with up to 22 stores expected to be shuttered in 2020.

Around 1,200 jobs are at risk due to the two Company Voluntary Arrangements (CVAs), one for property and one for retail, the company said today.

Read more: Debenhams owners to outline plans to shut 20 stores

The new owners of the troubled high street chain, which includes Barclays and hedge fund Silver Point, announced that three London branches in Wandsworth, Wimbledon and Orpington are set to close. 

The 22 stores earmarked for closure will have their rents reduced by 50 per cent until the first quarter of 2020, and 39 stores will continue to be charged the current rates.

The remaining 105 branches will have rents reduced by between 25 per cent to 50 per cent. 

Further store closures will be announced in due course and will be "dependent on future trading performance", however, Debenhams said previously it was aiming to close around 50 shops in total. 

The retailer's three remaining warehouses could be consolidated under the plans following the closure of its Lodge Farm site.

Terry Duddy, executive chairman of Debenhams, said: "Debenhams has a clear strategy and a bright future, but in order for the business to prosper, we need to restructure the group's store portfolio and its balance sheet, which are not appropriate for today's much changed retail environment.

"Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future."

Debenhams needs to secure at least 75 per cent creditor approval for each of the CVAs at a meeting on 9 May in order to proceed with the restructuring plan. 

Jim Tucker, KPMG senior restructuring partner and proposed supervisor of the CVAs, said: "Today’s announcement marks the next phase of Debenhams’ financial and operational restructuring strategy, following the comprehensive funding package announced at the end of March.

"If approved, and with the support of lenders and landlords, the CVAs will allow the business the flexibility to implement its turnaround strategy with a store estate that reflects the current UK retail environment.”

The embattled retailer fell into administration earlier this month following a battle with the firm's management and Sports Direct chief executive Mike Ashley, who was a majority shareholder in the company. 

Read more: Debenhams chief executive steps down after lenders take control

Debenhams rejected a £150m equity offer from Ashley on the eve of it entering administration in order to avoid a takeover by the retail billionaire. 

Ashley's 30 per cent stake was wiped out after Debenhams was sold to a company controlled by is lenders. 

Workers' union GMB slammed the closures as "devastating" news for employees.

Gary Carter, GMB national officer, said: “They will join the tens of thousands of retail workers made redundant in recent months.

“It’s another hammer blow for the high street, another established name gone and more retail space left empty.

“It’s about time this government stopped bickering over Brexit and did something to stem retail job losses and reinvigorate Britain’s high streets.”

These are all 22 Debenhams stores set to close in the UK in 2020: