Debenhams closes its doors

Debenhams is to close all of its 124 stores after JD Sports ended discussions over a rescue deal.

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”.

Recommended

Should you be worried about energy windfall tax proposals?
Energy

Should you be worried about energy windfall tax proposals?

Calls have been growing for a windfall tax on UK oil and gas producers. It's a popular idea, but is it a good one? And what does it mean for investors…
24 May 2022
Four high-quality US stocks to give shelter from the storm
Share tips

Four high-quality US stocks to give shelter from the storm

Professional investor Timothy Parton of the JPMorgan American Investment Trust picks four solid US stocks to buy now.
24 May 2022
Three undervalued mid-cap stocks with attractive prospects
Share tips

Three undervalued mid-cap stocks with attractive prospects

Professional investor Katen Patel of the JPMorgan Mid Cap Investment Trust picks three fast-growing mid-cap stocks to buy now.
24 May 2022
Could a stronger euro bring relief to global markets?
Currencies

Could a stronger euro bring relief to global markets?

The European Central Bank is set to end its negative interest rate policy. That should bring some relief to markets, says John Stepek. Here’s why.
24 May 2022

Most Popular

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Everything is collapsing at once – here’s what to do about it
Investment strategy

Everything is collapsing at once – here’s what to do about it

Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect th…
23 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022