Debenhams inches closer to plans to axe 20 stores this year
PUBLISHED: 10:45 04 February 2019 | UPDATED: 12:40 04 February 2019
Debenhams could be about to bring forward the closure of about 20 stores this year, raising the risk that its stores in Suffolk and Essex could be among those earmarked for closure.
The BBC is reporting that the chain, which has department stores in Ipswich, Bury Saint Edmunds, Colchester and Chelmsford, is exploring a company voluntary arrangement (CVA), which would allow the company to renegotiate its rental rates with landlords as well as speeding up plans to shut shops.
MORE: Can Debenhams stores in Suffolk and Essex survive the retail slump?
The billionaire founder of Sports Direct, Mike Ashley, is also a major shareholder in Debenhams, with a 29% stake.
The talks that Debenhams is holding with banks to increase its borrowings come ahead of a quarterly rent payment which is due on March 25, according to the BBC, although Debenhams has declined to comment.
The department store chain had announced back in October that it was increasing its store closure plans from 10 to 50 shops, in the next three to five years.
At the time, Debenhams said it was not ready to release a list of those stores it was looking to shut.
However, under a CVA, that closure programme would be accelerated and 20 shops could be shut in 2019.
CVAs are being used increasingly by companies on the struggling high street, as they ask property owners to slash rent prices to prevent the tenant moving out.
They have been used in recent times by the likes of Prezzo, Jamie’s Italian and New Look.
Debenhams has 165 stores and employs around 25,000 people, including around 500 in Ipswich.