Debenhams to give local councils ultimatum over store closures

Debenhams business rates
The councils' agreement on rent cuts would help establish the locations of 28 further outlets
// Debenhams to give local authorities ultimatum
// The company will negotiate business rates cuts
// A refusal to lower business rates will threaten local Debenhams stores

Debenhams has reportedly said it will give the local authorities an ultimatum aimed at securing business rates cuts as it pushes ahead with its shop closure plans.

The department store chain is due to hold talks with councils in an effort to inform them that a refusal to lower rates bills could pose a threat to their local Debenhams outlet, Sky News reported.

The negotiating comes as Debenhams also seeks further rent cuts from some landlords, with property costs – both rent and rates – posing as a “huge burden”.


While business rates are set by the government, Debenhams is asking local authorities to accept smaller sums than they were initially owed.

The councils’ agreement on rent cuts would help establish the locations of 28 further outlets which will be closed by the end of 2022.

Debenhams’ rates bill is reported to be around £70 million even after a number of store closures in the past year.

The retailer initially said it would seek to shut a total of 50 shops, leaving around 100.

A reported 22 of those 50 stores have closed in the past year, with Debenhams working to “identify” the remainder.

The news comes as retailers have continued to urge ministers to overhaul business rates in the Budget next month.

More than 50 major retailers wrote to the government earlier this month, in a letter which was signed by chief executives of retailers including Asda, B&Q, and Ann Summers.

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  1. Not sure Debenhams are in a position to ‘give… an ultimatum’ to the local authorities as that would likely open the floodgates for other retailers to demand the same.
    Do Debenhams really have enough pull on consumers to keep towns and retail parks afloat?

  2. I agree with Martin – LA’s cannot afford to effectively subsidise one particular national retailer without opening the floodgates to dozens of others. Sadly, even a business rate reduction would probably just delay the inevitable for many Debenhams stores. They are struggling not just because of occupancy costs, but primarily because they no longer provide a relevant or compelling reason for shoppers to visit their stores.

  3. Haven’t Debenhams heard of EU state aid rules? They can just be given large tax cuts not available to other large firms as it’s not legal!

  4. The issue with local government is that it continues to burden ALL rate payers with ever greater pension liabilities that result often in the biggest outflow of income.

    Take a big department store, it provides a lot of jobs and a destination hub, even toilets. This is something that local councils see to forget are a public service.

    Perhaps the issue is over-generous pensions. You can’t expect the private sector to look after the public sector retirement at the expense of the wealth-producing private sector needs.

  5. The answer sits with central government, which must review and change the basis upon which business rates are charged. The current system is punitive to businesses, and eventually more so to landlords which have to pay the full business rates when their premises are unoccupied.

  6. The UK’s business rates regime is utter madness of the highest order.

    A broad based land tax on unimproved land values is one thing (it discourages landbanking and shifts land use to its highest and best use) but a tax on improved land values just massively discourages investment. Its effect on retail is also to either push businesses out to low rent locations (i.e. retail parks) or to move to online fulfillment from out of centre warehouses. Either way you are putting massive incremental pressure on road infrastructure as shoppers drive miles out to retail parks and delivery vans drive miles in from warehouses.

    UK commentators keep blaming retailers and landlords for poor offerings and boring centres. Funnily enough though similar retailers and centres keep performing strongly on the Continent (and even in markets with more retail space per capital like Canada, Australia and NZ) while even the very best centres in the UK (Westfield Stratford and London, Bluewater etc are now seeing income declines).

    Funny how somebody who doesn’t have both hands tied behind their back can put up a good fight!


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