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Debenhams To Close Up To 50 Department Stores In UK

British department store chain Debenhams on Thursday (25) said it planned to shut about one-third of its shops, many more than previously announced, signalling another blow to a retail sector faced with fierce online competition.

Thursday's announcement had been expected following recent reports, with suggestions that some 4,000 jobs could be at risk.


Debenhams said in a statement that it was "closing up to 50 stores over three to five years, compared with the 10 previously identified".

"It has been a tough year for retail in 2018," chief executive Sergio Bucher said in the statement.

"We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging... At the same time, we are taking tough decisions on stores where financial performance is likely to deteriorate over time," he added.

Debenhams said it had plunged into a loss of almost £500 million ($645m) in its financial year to September on exceptional write-downs.

The group's revelations come after UK rival House of Fraser was rescued from collapse having been bought by retailer Sports Direct in August.

Department stores are among a string of major British retailers who have fallen victim to fierce online competition, rising business taxes and stretched household budgets - all coming amid Brexit uncertainty.

British budget chain Poundworld collapsed earlier this year with the loss of some 5,100 jobs.

"Debenhams’ decision to close 50 stores reflects the new harsh economic reality on the UK high street. Clicks are beating bricks, and retailers are having to cut their cloth accordingly," said Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown.

"Consumers are increasingly spending their money on experiences rather than stuff, and Debenhams is using some of its space to capitalise on that trend, with gyms and food outlets being opened in department stores," he added in a note to clients.

The problems affecting Debenhams and other British retailers are not confined to the UK, with US department store group Sears filing for bankruptcy earlier this month, with plans to close almost 150 stores.

Agence France-Presse

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