Debenhams’s entire 14,000 workforce is bracing for bad news as the retailer calls in liquidation experts.
The struggling British department store chain has appointed Hilco Capital to draw up contingency plans should an attempt to sell the business end in failure, according to Sky News.
On Tuesday Debenhams said it would cut a further 2,500 jobs, while taking ‘all necessary steps’ to give the chain every chance of a viable future.
It comes as Jet2 announces 102 pilots face the axe after flights were grounded due to the coronavirus pandemic.
At least 4,300 major job losses have been announced this week, with employment seeing the biggest fall in a decade in the three months to June.
The British department store chain has appointed Hilco Capital to draw up contingency plans should an attempt to sell the business end in failure, according to reports (file photo)
The move from Debenhams, which has 124 stores and employs a reported 14,000 staff across the UK, follows the chain collapsing into administration four months ago.
A source close to the company said administrators were required to have liquidators on standby ‘in the unlikely event that all other options for the business do not materialise’.
A spokesman for the retailer said: ‘Debenhams is trading strongly, with 124 stores reopened and a healthy cash position.
‘As a result, and as previously stated, the administrators of Debenhams Retail Ltd have initiated a process to assess ways for the business to exit its protective administration.
‘The administrators have appointed advisers to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors), or a sale to a third party.’
Hundreds of jobs have already been lost at the more than 200-year-old retailer since the start of lockdown after it permanently shut 18 stores.
In April, it hired administrators from FRP Advisory in a protective measure against creditors demanding their money.
A HISTORY OF DEBENHAMS
From the biggest department store group in the UK in the 1950s to bust: A complete timeline of Debenhams
Shoppers are seen rushing into a Debenhams store in London’s Soho at the first day of sales in 1977
1778 – Debenhams began as a draper business at 44 Wigmore Street in London.
1813 – Initially founded by William Clark, William Debenham became a partner in the business and changed the name to Clark & Debenham.
1837 – The business grew, opening branches in Cheltenham and Harrogate, before Clark retired and it became Debenham, Pooley & Smith.
1851 – It became Debenham & Freebody after Clement Freebody invested in the firm and it opened offices in South Africa, Australia, Canada and China.
1905 – It was incorporated as Debenhams Limited in 1905 and its new headquarters was completed in 1908 in west London’s Wigmore Street.
1920 – The company began buying existing department stores across the country, including Harvey Nichols in Knightsbridge.
1928 – Debenhams was listed as a company on the London stock exchange for the first time in 1928.
1950 – By 1950 Debenhams became the largest department store group in the UK.
At the time it owned 84 companies and 110 stores and in 1976 it acquired Brown’s of Chester.
1977 – Brown’s of Chester was the only store to retain its name when all the other company’s stores were rebranded Debenhams in 1977.
1980s – Debenhams stores were targeted by the Animal Liberation Front three times in the 1980s because of the sale of animal furs, which was stopped by the company as a result.
Two members of the movement were jailed for planting fire bombs in the Harrow, Romford, and Luton stores, causing more than £8million of damage.
In 2012, Green MP Caroline Lucas alleged an undercover police officer planted the bomb in the Harrow branch, causing an investigation in 2016.
1985 – The company merged with the Burton Group in 1985 but demerged in 1998.
2000s – Belinda Earl became CEO in 2000 and Debenhams opened its largest British store in Birmingham’s Bull Ring in 2003.
2009 – The company bought Principles after it went into administration and it acquired Magasin Du Nord in the same year.
2013 – Debenhams’s pre-tax profits dropped from £115million to £85million in 2013 and CFO Sim Herrick resigned in 2014 after being criticised for financial decisions.
2014 – Sports Direct bought 4.6 per cent of Debenhams shares in January 2014, and Mike Ashley secured 21 per cent of the company in August 2017.
2018 – In March 2018, Debenhams reduced 320 store management roles across the business and Sports Direct’s shares increased to 29.7 per cent.
The company announced its largest ever pre-tax loss of £491million in 2018 and the closure of up to 50 stores putting 4,000 jobs at risk.
2019 – It went into pre-pack administration on April 9, 2019, and on April 26 of that year, Debenhams announced it would close a further 22 stores after Christmas putting 1,200 jobs at risk.
The company fell into the hands of its lenders, a group of banks and hedge funds led by US firm Silver Point Capital.
2020 – The high street retailer announced it was going in to administration in April 2020.
The struggling department store called in liquidation experts in August putting a reported 14,000 jobs across the UK at risk.
Meanwhile, in June, the British Airline Pilots Association (Balpa) union said Jet2 was proposing cutting 102 pilot jobs after flights were grounded due to the coronavirus pandemic.
On Saturday, the union said the Leeds-based carrier was pressing ahead with the cuts despite a range of alternative options put forward by Balpa.
Several other airlines have announced job cuts after a collapse in demand caused by the pandemic, including British Airways, easyJet and Ryanair.
It comes as Jet2 announces 102 pilots face the axe after flights were grounded due to the coronavirus pandemic. Several other airlines have also announced job cuts (file photo)
It was announced yesterday that John Lewis’s Grand Central department store in Birmingham, above, which had been closed since lockdown, will never reopen, affecting 399 roles
Balpa general secretary Brian Strutton said: ‘This announcement is yet another which shows the desperate state of the British aviation sector.
‘Despite enormous efforts to work with Jet2 to find ways of saving these jobs, the airline is insisting on 102 redundancies.
‘This will be a particular kick in the teeth as many of those who may lose their jobs have recently joined the airline after having been dismissed from Thomas Cook which went into administration last year.’
In other developments on the UK’s high street this week:
- John Lewis confirmed 1,300 roles would be affected as all eight of its retail sites announced in July as at risk of closure will close permanently
- River Island said it would reduce its headcount by around 350 people by shaking up management at the retailer
- Jigsaw has said it could shutter up to 20 stores after seeing footfall plummet following the coronavirus lockdown
- Yo! Sushi revealed its plans to shut 19 of its sites and cut up to 250 jobs in a bid to protect its long-term future
- The Office for National Statistics said 730,000 people have been taken off payrolls since the beginning of the crisis in March
- But despite these potential job losses, casinos, bowling alleys, theatres, gig venues and wedding receptions have reopened from today
- Tattoo studios, beauty salons, spas and hairdressers can also now offer additional services, such as facials and eyebrow threading
Mr Strutton called for support for the industry which has also been affected by the implementation of quarantines on travellers from various holiday destinations.
He said: ‘The Government has a significant role to play in supporting the vital British aviation industry. Its quarantine changes keep throwing every restart plan into chaos.
‘If these quarantines are really needed, the Government must stump up the support to help the airline industry which is doing its best to get back on track but keeps being knocked back at every juncture.’
River Island has seen revenues and profitability hit by a slump in store footfall after reopening sites following the coronavirus lockdown (pictured: the chain’s Oxford Street store in London)
It comes as shocking new data revealed that the number of people on company payrolls in the UK has fallen by 730,000 since lockdown – the biggest drop in employment a decade.
Figures have started to show the huge impact of coronavirus on the labour market, with a wave of jobs being axed.
In the three months to June, the number in work decreased by 220,000 – the largest quarterly slump since 2009. Total hours worked slumped by a fifth over the quarter to the lowest level since 1994.
Biggest fall in employment for a decade as impact of Covid is felt
Employment saw the biggest fall in a decade in the three months to June as coronavirus hit.
Official figures showed the number in work decreased by 220,000 – the largest quarterly decrease since 2009.
The 0.2 per cent drop comes after a long period after the credit crunch in which employment levels have hit repeated highs.
The employment figures are still up 0.3 per cent year on year. And unemployment stayed flat, as the government’s support schemes and a rise in inactivity masked the true effects of lockdown.
Workers aged under 24 and those over 50 were the worst hit by the fall.
The total hours worked slumped by a fifth over the quarter to the lowest level since 1994.
Meanwhile, the numbers on payroll tumbled another 114,000 in July, as the claimant count – which includes some people who are in work – increased again to reach 2.7million.
John Lewis became the latest employer to cut a large number of jobs this week, as the chain announced its flagship £35million store in Birmingham will never reopen after closing during lockdown, putting 399 staff at risk.
River Island also said it will slash 350 jobs in a major store management shake-up in another devastating blow for the high street.
Sushi chain Yo! announced plans to cut up to 250 jobs and close 19 of its restaurants on Friday.
Meanwhile, Jigsaw has said it could shutter up to 20 stores after seeing footfall plummet following the coronavirus lockdown.
But despite the major losses in jobs since the start of the pandemic, the Bank of England has predicted Britain is on course for a rapid recovery.
Chancellor Rishi Sunak said: ‘Our economy has been hit hard by the virus, but the statistics out today show promise of Britain bouncing back.
‘The recovery won’t be easy but if we all play our part, either by going back to work in our offices or enjoying a meal out, we can overcome this together and come out stronger than before.’
Casinos, bowling alleys, theatres, gig venues and wedding receptions have also reopened from today, and unpampered Britons can finally get their facials.
Businesses have said they are ‘delighted’ to be welcoming customers back through their doors as part of the latest easing of lockdown restrictions in England.
Socially distanced audiences are allowed back into theatres and other indoor venues, while wedding receptions of up to 30 people will be permitted.
The move to allow indoor performances follows a ‘successful series of pilots’, Downing Street said.
Tattoo studios, beauty salons, spas and hairdressers can now offer additional services, including front-of-face treatments such as eyebrow threading.
The lockdown restrictions were due to be eased on August 1, but a spike in coronavirus cases at the time resulted in a pause for two weeks.
A casino staff member wipes the surfaces at The Rialto casino in London yesterday as enhanced safety and cleaning measures are put in place in preparation for reopening
A young family enjoy a game of bowling this morning at Lane7 in Newcastle, after lockdown restrictions on bowling alleys were eased for the first time day across the country
Wearing full personal protective equipment, Theresa Shangazhike, manager of the Spa Experience Wimbledon, gives her client, Lauren Shine, a facial treatment in Wimbledon
Brits were also able to get back out into restaurants, cafes and pubs with a 50 per cent discount up to £10 on a Monday, Tuesday or Wednesday this month as part of the Chancellor’s Eat Out to Help Out scheme.
The hospitality venues reopened from 6am on 4 July, on what was dubbed ‘Super Saturday’, in a key test of the progress made by imposing draconian restrictions on March 23 to halt the spread of Covid-19.
Mr Sunak announced the scheme as part of his Covid-19 mini-Budget to support the beleaguered hospitality industry.
If two people eat out together, they count as two individual meals in the statistics.
The average claim has been for around £5, bringing the total cost of the policy to around £50m thus far.
Figures from HMRC revealed it has received 10,540,394 claims under the scheme up to August 9.
Major potential job losses announced since March 23
- August 14 – John Lewis – 1,300 at risk
- August 14 – Yo! Sushi – 250
- August 14 – River Island – 350
- August 12 – NatWest – 550
- August 11 – InterContinental Hotels – 650 worldwide
- August 11 – Debenhams – 2,500
- August 7 – Evening Standard – 115
- August 6 – Travelex – 1,300
- August 6 – Wetherspoons – 110 to 130
- August 5 – M&Co – 380
- August 5 – Arsenal FC – 55
- August 5 – WH Smith – 1,500
- August 4 – Dixons Carphone – 800
- August 4 – Pizza Express – 1,100 at risk
- August 3 – Hays Travel – up to 878
- August 3 – DW Sports – 1,700 at risk
- July 31 – Byron – 651
- July 30 – Pendragon – 1,800
- July 29 – Waterstones – unknown number of head office roles
- July 28 – Selfridges – 450
- July 27 – Oak Furnitureland – 163 at risk
- July 23 – Dyson – 600 in UK, 300 overseas
- July 22 – Mears – fewer than 200
- July 20 – Marks & Spencer – 950 at risk
- July 17 – Azzurri Group (owns Zizzi and Ask Italian) – up to 1,200
- July 16 – Genting – 1,642 at risk
- July 16 – Burberry – 150 in UK, 350 overseas
- July 15 – Banks Mining – 250 at risk
- July 15 – Buzz Bingo – 573 at risk
- July 14 – Vertu – 345
- July 14 – DFS – up to 200 at risk
- July 9 – General Electric – 369
- July 9 – Eurostar – unknown number
- July 9 – Boots – 4,000
- July 9 – John Lewis – 1,300 at risk
- July 9 – Burger King – 1,600 at risk
- July 7 – Reach (owns Daily Mirror and Daily Express newspapers) – 550
- July 6 – Pret a Manger – 1,000 at risk
- July 2 – Casual Dining Group (owns Bella Italia and Cafe Rouge) – 1,909
- July 1 – SSP (owns Upper Crust) – 5,000 at risk
- July 1 – Arcadia (owns TopShop) – 500
- July 1 – Harrods – 700
- July 1 – Virgin Money – 300
- June 30 – Airbus – 1,700
- June 30 – TM Lewin – 600
- June 30 – Smiths Group – ‘some job losses’
- June 25 – Royal Mail – 2,000
- June 24 – Jet2 – 102
- June 24 – Swissport – 4,556
- June 24 – Crest Nicholson – 130
- June 23 – Shoe Zone – unknown number of jobs in head office
- June 19 – Aer Lingus – 500
- June 17 – HSBC – unknown number of jobs in UK, 35,000 worldwide
- June 15 – Jaguar Land Rover – 1,100
- June 15 – Travis Perkins – 2,500
- June 12 – Le Pain Quotidien – 200
- June 11 – Heathrow – at least 500
- June 11 – Bombardier – 600
- June 11 – Johnson Matthey – 2,500
- June 11 – Centrica – 5,000
- June 10 – Quiz – 93
- June 10 – The Restaurant Group (owns Frankie and Benny’s) – 3,000
- June 10 – Monsoon Accessorise – 545
- June 10 – Everest Windows – 188
- June 8 – BP – 10,000 worldwide
- June 8 – Mulberry – 375
- June 5 – Victoria’s Secret – 800 at risk
- June 5 – Bentley – 1,000
- June 4 – Aston Martin – 500
- June 4 – Lookers – 1,500
- May 29 – Belfast International Airport – 45
- May 28 – Debenhams (in second announcement) – ‘hundreds’ of jobs
- May 28 – EasyJet – 4,500 worldwide
- May 26 – McLaren – 1,200
- May 22 – Carluccio’s – 1,000
- May 21 – Clarks – 900
- May 20 – Rolls-Royce – 9,000
- May 20 – Bovis Homes – unknown number
- May 19 – Ovo Energy – 2,600
- May 19 – Antler – 164
- May 15 – JCB – 950 at risk
- May 13 – Tui – 8,000 worldwide
- May 12 – Carnival UK (owns P&O Cruises and Cunard) – 450
- May 11 – P&O Ferries – 1,100 worldwide
- May 5 – Virgin Atlantic – 3,150
- May 1 – Ryanair – 3,000 worldwide
- April 30 – Oasis Warehouse – 1,800
- April 29 – WPP – unknown number
- April 28 – British Airways – 12,000
- April 23 – Safran Seats – 400
- April 23 – Meggitt – 1,800 worldwide
- April 21 – Cath Kidston – 900
- April 17 – Debenhams – 422
- March 31 – Laura Ashley – 268
- March 30 – BrightHouse – 2,400 at risk
- March 27 – Chiquito – 1,500 at risk
Britain’s economy on course for rapid recovery from coronavirus crisis, predicts Bank of England chief
By James Salmon Associate City Editor for the Daily Mail
Chief economist Andy Haldane says strong consumer spending has already helped the UK claw back as much as half of the losses triggered by the pandemic.
He insists ‘now is the time to see the economic glass as half full rather than half empty’ – as official statistics reveal a sharp increase in the number of white collar workers returning to their offices.
Responding to the figures, Chancellor Rishi Sunak said: ‘Our economy has been hit hard by the virus, but the statistics out today show promise of Britain bouncing back.
‘The recovery won’t be easy but if we all play our part, either by going back to work in our offices or enjoying a meal out, we can overcome this together and come out stronger than before.’
Chief economist Andy Haldane says strong consumer spending has already helped the UK claw back as much as half of the losses triggered by the pandemic
Writing in the Daily Mail, Mr Haldane says the economy is expected to expand by more than a fifth in the second half of the year, which would be ‘by far the fastest rise’ since quarterly records began.
He says: ‘The foundations for an economic recovery – a rapid one – are already in place, hiding in plain sight. Economic activity in the UK is not falling like stone, in fact it has now been rising for more than three months, sooner than anyone expected. It has also recovered far faster than anyone expected.’
His upbeat intervention comes after it was confirmed on Wednesday that Britain has plunged into recession, with GDP falling by a record 20.4 per cent in the second quarter of this year.
But official figures also revealed that after collapsing in April – the first full month of lockdown – the economy expanded by 2.4 per cent in May and 8.7 per cent in June.
An Office for National Statistics report yesterday suggested almost half of Britons commuted to work last week as pleas by Boris Johnson to return to the office appeared to be making an impact
An Office for National Statistics report yesterday suggested almost half of Britons commuted to work last week as pleas by Boris Johnson to return to the office appeared to be making an impact.
Under guidance, which came into effect at the beginning of the month, employers were urged to encourage white collar staff to go back to the office if it is safe to do so. Previously the advice was to work from home if possible.
The ONS report showed 48 per cent of people commuted to work last week, up from just 29 per cent towards the end of May.
It also showed that 23 per cent worked solely from home, down from a peak of 38 per cent in mid-June. And last week just 3 per cent of workers said they were furloughed, down from 15 per cent in May.
Hammer blow for The City of London as investment firm Schroders allows thousands of staff PERMANENTLY work from home
An asset management firm with more than £525bn under its control has told its 5,000 workers they no longer have to return to the office.
Schroders, who moved into a state-of-the-art office in Wall Place, near Moorgate Station in 2018, emailed staff about the proposed change.
Investment management firm Schroeders has told staff they no longer need to come into the office. The firm, which has control of funds worth £520bn, moved into new state-of-the-art offices near Moorgate in 2018, pictured
Prime Minister Boris Johnson is desperate for office workers to return to the city centre as the revenues of public transport companies have plummeted, while fewer people commuting also impacts service industries such as cafes, bars, restaurants and sandwich shops
Prime Minister Boris Johnson is desperate for office workers to return to the city centre as the revenues of public transport companies have plummeted, while fewer people commuting also impacts service industries such as cafes, bars, restaurants and sandwich shops.
However, according to The Telegraph, the firm believes the traditional 9-5 working week is dead.
Finance has traditionally had a reputation for presenteeism, with workers expected to sit behind their desks for at least 12 hours a day and going home before other people was seen as a sign of weakness.
The new regulations, which will continue when the Covid-19 pandemic has passed – were sent to employees using the firm’s intranet system.
One source told The Telegraph: ‘Staff have been told the firm will not go back to nine-to-five.’
Pre-Covid, staff were entitled to work from home one day a week.
It is understood that since the firm reopened its London office, only 100 staff returned to their desk.
A new survey has found that one in three companies expect to make redundancies by the end of September in a blow to Britain’s hopes of economic recovery from the coronavirus crisis.
The 33 per cent figure – revealed in a survey by human resources body the Chartered Institute of Personnel and Development (CIPD) and recruiter the Adecco Group – represents a rise from 22 per cent of companies shown in the groups’ spring quarterly report.
The latest survey suggests the jobs market will continue to shrink through the summer quarter, with the number of employers expecting to hire workers falling further below the number planning for redundancies.
Some 38 per cent of firms will introduce new or flexible working arrangements, with 69 per cent extending working from home options.