Debenhams to close 118 stores after Boohoo deal
The fashion retailer has bought Debenhams’ brand name, intellectual property and customer lists, but physical stores are not included in the deal.
A statement from Boohoo said: “Debenhams is a long-standing and leading UK fashion and beauty retailer with high brand awareness, and an established online platform with approximately 300 million UK website visits per annum. This makes it a top 10 retail website in the UK by traffic.
“The transaction represents a fantastic opportunity to grow the group’s target addressable market and increase the share of wallet opportunity through a new capital light and low-risk operating model that is complementary to the group’s highly successful direct-to-consumer multi-brand platform.”
Administrators at FRP Advisory said the 118 Debenhams stores would open when Covid-19 restrictions allow for clearing stock – then close permanently. It added that although the deal may provide some job opportunities for Debenhams staff, it did not safeguard the jobs of Debenhams’ employees beyond the winding down period.
FRP Advisory announced last month that Debenhams would be wound down, after working on a sales process for the chain since its latest collapse in April 2020.
Emily Salter, retail analyst at GlobalData, said: “In a surprising turn of events that proves the speed of the significant changes that the retail sector is undergoing, the Boohoo group has acquired the intellectual property assets of Debenhams, raising the question of the relevance of traditional department stores in a post-pandemic environment. The group will relaunch Debenhams’ website as an online marketplace, with its expertise at operating digital pureplays providing some hope that the retailer’s fortunes could be turned around, benefitting from the shift to online shopping.
“However, there is strong competition from other online marketplaces, not least from leading force Amazon, but also from the likes of Next and ASOS, so the Boohoo group will have to develop a more compelling branded offer for Debenhams for it to succeed. The acquisition of Debenhams also provides the group with a chance to expand its empire into new categories such as beauty, sports and homewares, likely translating into the launch of branded products in these sectors on its existing websites such as boohoo.com and PrettyLittleThing, helping them stand out in the crowded fast fashion market.”