The administrator of Debenhams UK, FRP Advisory, has confirmed that boohoo group plc has signed an agreement to buy the Debenhams brand, and other business assets including all the in-house brands and websites – which will take full effect following the completion of the current stock liquidation programme, which is continuing online.
According to FRP, this transaction will enable "a new Debenhams-branded business to emerge under strong new ownership, including an online operation and the opportunity to secure an international franchise network that will operate under licence using the Debenhams name".
The transaction does not affect Magasin du Nord in Denmark, which continues to operate independently.
boohoo, which operates across the fashion and beauty sectors, has paid a cash consideration of £55m to acquire the global rights to Debenhams' brands and websites. Once the stores are able to re-open and the stock liquidation can continue in-store, the website will be operated by boohoo. The closing-down sale will continue in stores for several weeks until the stock liquidation is completed, and the value of this stock will be retained for creditors. All of the UK stores will then be permanently closed.
Geoff Rowley, joint administrator and partner of FRP Advisory, says: “We are pleased to have secured the future for this great brand, and to have created the opportunity for a new Debenhams-branded business to emerge in a different shape beyond the pandemic.
"I expect that the agreement with boohoo may provide some job opportunities but we regret that this outcome does not safeguard the jobs of Debenhams’ employees beyond the winding-down period. We are very grateful that they have worked tirelessly through this very challenging period and will continue to support the closing-down sale. I’d also like to thank the management team, who have worked very hard throughout to protect the business and support us in delivering the best outcome for stakeholders.”
Daniel Whytock, CEO of DownYourHighStreet.com, offers the following comment: “Consumer choice and jobs will be most severely impacted by these changes. However independent shops will have the opportunity to prosper as consumers look for alternatives to the household names that have been acquired and taken online.
“I predict that within five years we will see high streets offering a more unique experience. Independent retailers will thrive as they are small enough to adapt quickly to changes, and with these large brands leaving the high street, smaller retailers will be the ones offering consumers a place to shop in person – where they can talk to someone, feel and see the goods they want to purchase, and know that returns can be processed quickly and easily if needed.
“Also, shopping is, for many, a social activity. So once the restrictions are lifted many people will be looking for that in-person experience to complement their online shopping.
“The Debenhams department store was founded in the 1700s, one of the first ever to exist, so this is a very sad loss for the high street. A department store, by definition, offers a variety of consumer goods in different areas of the store – each department focused on a different category. This is very much like an ecommerce store, although ecommerce offers you everything you need within a few seconds without the need to walk around. Debenhams becoming part of an online marketplace is somewhat inevitable.
“Even with the rise of ecommerce, consumers wanting their shopping the very next day and at the best price, let’s not forget that human beings naturally desire physical experiences and the retailers that offer the best experience will prosper on the high street in years to come.”