Debenhams has named 22 stores that will close next year as part of a plan to turn around its fortunes that will eventually see 50 branches close.
The department store chain said on Friday that 1,200 employees would be affected by the first phase of closures.
Debenhams was taken over by its lenders this month after being put into administration. The new owners include Barclays and Bank of Ireland, as well as US investment firms.
It first put forward proposals in October to shut 50 stores over three years as it bids to cut costs. More detailed plans have now been formally laid out and will be put to creditors, 75 per cent of whom must approve before they can go ahead.
Terry Duddy, Debenhams executive chairman 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 has 166 stores across the UK, close to a third of which will shut over the next three years under the proposals.
The 22 closures set to take place next year will not occur on one day, Debenhams said.
The plan has been put forward under an insolvency process known as a Company Voluntary Arrangement (CVA). A creditor vote will take place on 9 May.
KPMG, which is handling the CVA, said consultations had already taken place with key creditors with further talks planned to ensure the full details of the proposal are understood.
Suppliers will continue to be paid “on time and in full, and terms of employment are not impacted”, KPMG said.
A key part of rescue plans for the retailer is to slash its rent bill by closing stores and renegotiating leases with landlords.
Leases will be retained at current rents for 39 stores, with the 22 stores earmarked for closure seeking rent reductions of 50 per cent until next year. The remaining stores will pay 25 to 50 per cent less rent under the plans.
High costs and large debts have made it difficult for Debenhams to invest as it attempts to deal with the threat posed by changing consumer habits and the rise of online giants such as Amazon.
Gary Carter, national officer for the GMB union, said the closures were a "travesty".
“Although many will not be surprised by the closure announcements - this is devastating news for Debenhams employees who have battled hard to keep the company afloat," Mr Carter 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."
Last week, Debenhams chief executive Sergio Boucher quit after two difficult years in charge.
He had faced fierce attacks from Sports Direct founder Mike Ashley, who was seeking to take over at Debenhams and described the administration as a “national scandal”.
Mr Ashley’s company owned a 30 per cent stake in Debenhams but all shareholders were wiped out as part of the administration process.
The stores to close in 2020:
- Birmingham Fort
- Great Yarmouth
- Welwyn Garden City
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