Debenhams has set out the next steps of its store closure strategy, led by a new property director.
The department store chain has appointed Prime Retail to identify around 28 stores for its next tranche of closures, alongside CWM and retained agent Time Retail. These will shut over the next two to three years, as part of its ongoing company voluntary arrangement.
The trio will negotiate terms with the remaining landlords affected by its CVA on a case-by-case basis, alongside the retailer’s own team.
They will also hold discussions with councils on its “huge” business rates burden. The retailer has confirmed that even after closures, its rates bill totals around £70m.
Debenhams has outlined its hopes that landlords will agree to “terms which will ensure a sustainable future” for its business.
The retailer will shut 22 of its 166 stores by the end of the month as part of its ongoing CVA, which seeks 50 closures altogether. There are no further closures planned for 2020.
What the chief exec says
Stefaan Vansteenkiste, chief executive of Debenhams, said the retailer ultimately plans to retain more than 100 profitable UK stores.
“Following our CVA last year, everyone at Debenhams is focused on implementing our clear plan for the business, which will involve a smaller but profitable chain of upwards of 100 stores,” said Vansteenkiste.
“Retail market conditions remain challenging and the rental market continues to rebase, so with the support of our agents, we are talking to our landlords and local authorities so that we can understand which stores we can trade profitably, and those where we will exercise break clauses.
“This is in line with the plan we announced last year – there are no plans to close further stores earlier than 2021, and as always we will work closely to minimise any impact on our customers, colleagues, and the communities in which we operate.”
Who is Debenhams’ property boss?
Chris Garner, who is on secondment from restructuring specialist Alvarez & Marsal, has been chosen as Debenhams’ new interim property director.
He follows Vansteenkiste, who joined the retailer from the consultancy in April as chief restructuring officer before his appointment as chief executive in August.
Garner replaces Clive Bentley, who was hired in 2017 on an interim basis to lead Debenhams’ real estate strategy. During his time at the company, Bentley led landlord negotiations on its CVA as well as its exit from its corporate headquarters.
He has since joined Holland and Barrett as a property director, EG has also learned, reporting to group retail and property director Anthony Houghton.
Bentley will lead the property function at Holland & Barrett, covering all aspects of real estate including disposals, acquisitions, location planning, asset management, construction and new format development, as well as concession relationships.
See also: Debenhams CVA survives court challenge
See also: Debenhams’ CVA plans approved by creditors
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