// Debenhams reveals plans to make 2500 job cuts
// It will affect sales manager, visual merchandise manager & selling support manager positions
// Debenhams says it needs to ensure store costs are “aligned” with a volatile trading climate
Debenhams has confirmed plans to make 2500 redundancies as part of its latest cost-cutting drive to survive the coronavirus crisis.
The department store chain said it was looking to make staff who hold sales manager, visual merchandise manager and selling support manager positions redundant.
Debenhams told Retail Gazette that affected staff, who are still on furlough, have been informed of the decision and will exit the business by the end of this week.
The latest round of job cuts are part of Debenhams’ plans to streamline its shop floor teams and reduce costs as the coronavirus pandemic shows no sign of abating.
The retailer added that it had no plans to shut more stores as part of the latest restructure.
Debenhams said that while it has been trading ahead of forecasts since it reopened 124 stores after non-essential retail lockdown measures were eased on June 15, it needed to ensure store costs were “aligned” with a trading climate that remained volatile.
“We have successfully reopened 124 stores, post-lockdown, and these are currently trading ahead of management expectations,” Debenhams said in a statement.
“At the same time, the trading environment is clearly a long way from returning to normal and we have to ensure our store costs are aligned with realistic expectations.
“Those colleagues affected by redundancy have been informed and we are very grateful to them for their service and commitment to Debenhams.
“Such difficult decisions are being taken by many retailers right now, and we will continue to take all necessary steps to give Debenhams every chance of a viable future.”
The news means Debenhams is the latest major retailer to announce significant job cuts amid the pandemic, with the likes of WHSmith, Dixons Carphone, M&Co, Dyson, Ted Baker, Burberry, Boots, John Lewis, Selfridges, Harrods and Marks & Spencer all announcing redundancies in the past month or so.
Debenhams’ latest round of job cuts also comes two weeks after news emerged that it was pushing forward with a plan that could see a change of hands of the business.
In late July, investment bank Lazard was appointed to oversee a process that could determine Debenhams’s future and handle any talks with potential buyers.
Possible outcomes include the current owners retaining the business, potential joint-venture arrangements that could involve new investors, or a sale to a third party, Debenhams said in a statement.
A Chinese consortium is reportedly among potential investors that have already emerged, as well as Frasers Group owner Mike Ashley, despite Debenhams rejecting his various takeover offers last year in the months leading up to its first administration.
During the lockdown period, Debenhams fell into administration for a second time – albeit a “light touch” one, meaning directors are still running the business rather than handing it over to the administrators.
Before the coronavirus pandemic gripped the UK in March, Debenhams operated from around 142 stores.
The 18 stores that have permanently shut down since lockdown already led to potentially thousands of job cuts – although Debenhams never confirmed an exact figure.
The administration process also led to scores of job cuts in Debenhams’ head office functions.
Meanwhile, Debenhams reportedly entered lockdown with debt of £600 million.
When it first went into administration in 2019, shareholders had their stake wiped out as ownership of the department store chain transferred to a consortium of financial investors known as Celine.
Shortly after, Debenhams underwent a CVA process that saw it close stores and renegotiate rents.
While Debenhams’ Irish operation has already placed into liquidation, a liquidation of its core UK business would only happen of all options have been exhausted.