How Debenhams’ Liquidation Is Connected to Topshop Parent Arcadia’s Insolvency

Debenhams is closing up shop for good.

The British department store announced today that it plans to permanently shut down all of its locations across the United Kingdom, where it operates 124 outposts as well as its online platform. (Subsidiary Magasin du Nord in Denmark continues to operate independently and will not be impacted.)

In a statement, Debenhams shared that its struggles were compounded by the coronavirus pandemic, which led it to file for administration for the second time in the calendar year back in April. Along with FRP Advisory, it was neither able to find a buyer nor restructure its business and thus moved forward with a wind-down of its operations as it seeks offers for all or parts of the company. About 12,000 jobs are at risk.

“All reasonable steps were taken to complete a transaction that would secure the future of Debenhams,” wrote joint administrator Geoff Rowley of FRP. “However, the economic landscape is extremely challenging and — coupled with the uncertainty facing the UK retail industry — a viable deal could not be reached. The decision to move forward with a closure program has been carefully assessed, and while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”

The announcement came less than 24 hours after Topshop parent Arcadia Group began insolvency proceedings. The company — also owner of the Topman, Burton and Dorothy Perkins brands — tapped Deloitte as an administrator to oversee a “trading administration” as it plans to continue operations at its 444 locations in the United Kingdom plus 22 other units around the world. It employs about 13,000 workers — 9,294 of which were on furlough at the time of the administrators’ appointment.

Arcadia is the biggest concession operator in Debenhams: Arcadia’s Burton, Dorothy Perkins, Miss Selfridge, Evans and Wallis labels altogether represent about 5% of Debenhams’ sales. Both retailers have units across big-name malls and main streets across the United Kingdom, where thousands of stores are currently shuttered in line with renewed lockdowns and other restrictions.

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