DEBENHAMS stores are set to close down after online fashion retailer Boohoo bought the brand and website for £55m, it was announced today, Monday
The deal does not include the firm’s High Street stores or its 12,000 workforce.
The 242-year-old Debenhams chain, which has a flagship anchor store in Warrington’s Golden Square, is already in the process of closing down, after administrators failed to secure a rescue package for the business.
A closing-down sale started at 124 Debenhams stores in December, as the administrators continued to seek offers for all or parts of the business.
The company recently announced that six shops would not reopen after lockdown, including its flagship department store on London’s Oxford Street.
Administrators FRP Advisory said: “This transaction will allow a new Debenhams-branded business to emerge under strong new ownership, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name.”
Boohoo has already bought a number of High Street brands out of administration including Oasis, Coast and Karen Millen, but not the associated stores.
Executive chairman, Mahmud Kamani, said: “This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK’s largest marketplace.
“Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.”
Boohoo said Debenhams was expected to relaunch on Boohoo’s web platform in early 2022.
In the meantime, Debenhams will continue to operate its website for an agreed period.
Boohoo said its plans included “transforming Debenhams through the development of an exciting online marketplace, capitalising on the sector’s structural shift to online”.
It added that it intended to expand Debenhams’ product categories and its supplier partnerships.
Boohoo will fund the deal from its existing cash reserves.
“The group will only be acquiring the brands and associated intellectual property rights – the transaction does not include Debenhams’ retail stores, stock or any financial services,” Boohoo added.
Debenhams has struggled for years with falling profits and rising debts, as more shopping has moved online. It called in administrators twice in two years, most recently in April.
Its position was made worse during the coronavirus pandemic as non-essential retailers were forced to close for prolonged periods.
The firm has already trimmed its store portfolio and cut about 6,500 jobs since May, as it struggled to stay afloat.
