Debenhams closes its doors

Debenhams is set to wind down the business and close all 124 stores after JD Sports ended discussions over a rescue deal, says Sarah Butler in The Guardian. While Debenhams’ administrators have been seeking a buyer since the summer, they now admit that the sale process has “not resulted in a deliverable proposal”, blaming the “extremely challenging” economic landscape and the pandemic-related “uncertainty” facing the UK retail industry.

No wonder JD Sports pulled out, says Jonathan Eley in the Financial Times. The market reacted “badly” to the news that the successful retailer was planning a bid for Debenhams, with the stock sliding by 10%. The collapse of Arcadia, a leading concession in Debenhams’ stores, is “unlikely to have helped sentiment”. JD’s departure means that Mike Ashley, the founder of JD’s rival Sports Direct, is expected to be a “prominent bidder” for any stores or parcels of stores that become available as part of the process. 

Ashley is positioning himself as the “only saviour of either Arcadia or Debenhams”, says Ben Marlow in The Daily Telegraph. But while his “long courtship” of Debenhams has already cost Sports Direct shareholders £150m thanks to a failed investment in the company, he is not assured of success. His “highly provocative offer” to bail Arcadia out with a £50m loan is likely to ensure that Arcadia chair Philip Green works hard to block him. Although Arcadia’s various brands are technically in the hands of administrators, UK retail is a “small world” and Green “still knows all the big-hitters”.