Debenhams' GCC stores 'not affected' by closure plans

British department store's UK business has been hit by falling sales and debt
Debenhams' GCC stores 'not affected' by closure plans
Founded in 1778, Debenhams was once one of the United Kingdom’s biggest chain of department stores, but it has been hard hit by falling sales and rising debt.
By Shane McGinley
Sun 28 Apr 2019 12:05 PM

Debenhams stores in the Gulf will not be impacted by the British retailer’s announcement it is to shut 22 stores next year, as its overseas outlets are operated by franchise partners, a spokesperson said at the weekend.

Debenhams on Friday announced that next year it plans to close 22 stores as part of the latest financial scheme designed to keep the popular retail brand in business.

The company operates around 240 stores across 27 countries, but a spokesperson from Brunswick Group, the public relations firm representing Debenhams, told Arabian Business that the international stores are “not affected” by the announcement as “the stores in the UAE and Gulf are operated by franchise partners”.

The majority of the Gulf stores are operated by Kuwait’s Alshaya Group, which owns the franchise for around 90 global brands – such as Starbucks, H&M, Mothercare, American Eagle Outfitters, The Body Shop, M.A.C, Victoria’s Secret, Boots and Pottery Barn – and operates around 4,000 stores, cafes, restaurants and leisure destinations across the region.

Arabian Business has contacted the Alshaya Group for comment.

Falling sales

Founded in 1778, Debenhams was once one of the United Kingdom’s biggest chain of department stores, but it has been hard hit by falling sales and rising debt.

In the financial year to September 2018, the group made a loss of £491.5 million ($634.7 million), against profits of £59 million the year before.

“In order for the business to prosper, we need to restructure the group’s store portfolio and its balance sheet, which are not appropriate for today’s much changed retail environment,” Debenhams executive chairman Terry Duddy told Reuters.

“Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future,” he added.

Reuters reported that the new plan will see around 50 of the brand’s 166 UK-based stores closing, with 22 set to close by 2020.

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