Debenham's Ltd V Perkins

Debenhams plc was a British department store chain operating in the United Kingdom, Denmark and the Republic of Ireland. It was founded in 1778 as a single store in London and grew to 178 locations across those countries, also owning the Danish department store chain Magasin du Nord. In its final years, its headquarters were within the premises of its flagship store in Oxford Street, London. The range of goods sold included middle-to-high-end clothing, beauty, household items, and furniture.

The company suffered financial difficulties in the 21st century and entered administration twice, in April 2019 and April 2020. In November 2020, Debenhams' main concession operator Arcadia also entered administration, leading to the collapse of talks with JD Sports and Frasers Group over a potential rescue. As a result, Debenhams announced it would be liquidated.

The Debenhams brand and website were purchased by the online retailer Boohoo for £55m in January 2021. However, Boohoo did not retain any stores, meaning the loss of up to 12,000 jobs. Boohoo relaunched the website as Debenhams.com on 12 April 2021 under their own company, Debenhams.com Online Limited, when Debenhams' stores reopened to begin closing down sales following a relaxation of some COVID-19 restrictions. After 243 years in business, the remaining Debenhams department stores closed for the final time during May 2021.

History

18th and 19th centuries

The business was formed in 1778 by William Clark, who began trading at 44 Wigmore Street in London as a drapers' store. In 1813, William Debenham became a partner and the corporate name changed to ''Clark & Debenham''. The shop was later renamed Cavendish House and carried drapery, silks, haberdashery, millinery, hosiery, lace, and family mourning goods. As the trade grew, the partners determined to expand the business by opening branches in Cheltenham and Harrogate.

By 1823, Clark & Debenham had opened a small drapery business at 3 Promenade Rooms, Cheltenham, selling a selection of silks, muslins, shawls, gloves, lace and fancy goods. In 1837, Clark retired from the business and Debenham assumed two of his most trusted staff, William Pooley and John Smith, as partners, trading in both London and Cheltenham as Debenham, Pooley & Smith. By 1840, the management of the Cheltenham branch appears to have been given to Clement Freebody, Debenham's brother-in-law. Around 1843, another branch shop was launched in Harrogate.

Extended and refurbished premises opened in Cheltenham in October 1844. Pooley and Smith retired from the business in 1851 when Debenham took his son, William, and Clement Freebody into partnership, trading as Debenham, Son & Freebody. At this time all three shops in London, Cheltenham, and Harrogate were trading in similar goods and issued a joint catalogue, called the Fashion Book, that was the basis of an extensive mail-order trade. In 1876 when Freebody retired, a new partnership, Debenham & Hewitt, was formed. George Hewitt appears to have worked at the Cheltenham store as a draper's assistant during the early 1860s but details of his subsequent career are not known. By 1883, George Hewitt was the sole owner of the Cheltenham business, Frank and William Debenham having withdrawn to manage the London store as a separate concern.

20th century

The business was incorporated as ''Debenhams Limited'' in 1905. A new headquarters building, which was designed by William Wallace and James Glen Sivewright Gibson and built by Trollope & Colls, was completed in Wigmore Street in 1908. The modern Debenhams group grew from the acquisition of department stores in towns and cities throughout the UK, under the leadership of its chairman, Ernest Debenham. The first of these purchases, ''Marshall & Snelgrove'' at Oxford Street in London, was acquired through a one sided merger in 1919. Later purchases included Harvey Nichols in London's Knightsbridge in 1920. Most of the acquired stores retained their former identities until a unified corporate image was rolled out. The company was first listed on the London Stock Exchange in 1928, shortly after it had purchased fellow retail group Drapery Trust. In 1959 the business failed in a takeover of rival department store group Harrods, rivalling United Drapery Stores and eventual winner House of Fraser.

In 1972, United Drapery Stores made an offer to purchase Debenhams, along with interest from Sears plc and Tesco, but were fought off by chairman Sir Anthony Burney. In 1976 the company acquired Browns of Chester. It remained the only one of the company's UK stores to have retained an individual identity until all stores closed in 2021. The business diversified during the 1970s buying South East based supermarket group Cater Brothers in 1972, after the death of its chairman Leslie Cater. Using the new purchasing power Debenhams modernised its 40 food halls within its stores, branding them Cater's Food Halls, and opened two new Cater superstores. However the business declined in the intense marketplace and in 1979 the chain was sold to Allied Suppliers who converted the Cater stores into their Presto format.

Debenhams was targeted three times during the 1980s by the Animal Liberation Front in protest at the sale of animal furs in stores. Stores in Romford, Luton, and Harrow were fire-bombed by members, the worst attack being on the Luton store. As a result, the company stopped selling clothes with animal furs. It was alleged by Caroline Lucas MP in a debate in Westminster Hall that Bob Lambert, a then undercover police officer, planted the fire bomb that caused £340,000 worth of damage to the Harrow branch of Debenhams in 1987. It is unclear if anything has come of these allegations as of March 2014.

In 1985 the company was acquired by the Burton Group. Following the closure of the store in Dudley in January 1981 and the Birmingham store in 1983, the company's only store in the West Midlands for the next six years was a town centre store in Walsall. On 4 November 1989, it opened a store at the Merry Hill Shopping Centre in Brierley Hill. Debenhams demerged from the Burton Group in January 1998 and was once again listed as a separate company on the London Stock Exchange. It expanded under the leadership of Belinda Earl who was appointed CEO in 2000.

21st century

Debenhams opened its largest British store on 4 September 2003, at the new Bull Ring shopping centre in Birmingham. The new store contained 19,230 sq m and opened 20 years after the company closed its Birmingham city centre store due to declining trade. A private consortium named Baroness Retail Limited acquired the company in November 2003, and it returned to a listing on the London Stock Exchange in 2006. The consortium comprised CVC Capital Partners, Texas Pacific Group, Merrill Lynch Global Private Equity, and management.

The company purchased the brand name and stock of Principles in March 2009 after the business entered administration. Principles operated concessions within 121 Debenhams stores, and was subsequently relaunched by Ben de Lisi as part of the Designers at Debenhams range. In November 2009, Debenhams acquired the Danish department store group Magasin Du Nord for £12.3 million. The company operates six stores in Denmark under the Magasin brand.

In July 2010 Debenhams purchased the 115 Faith concessions trading within its stores, after Faith entered administration. In April 2012 the company announced it would be building 14 new stores, and was in negotiations over a further 25 sites in the UK. Debenhams agreed to become the anchor store at the Riverside shopping centre in Shrewsbury. By September 2012, the company announced that like-for-like sales had risen by 3.3% in the six months up to that date.

Debenhams moved to a new headquarters in 2013, in Brock Street, London. The company moved to a new building, built by British Land in Regent's Place. The company leased of office space from British Land for 25 years. The company began a refurbishment of its flagship store in Oxford Street in 2013, which involved the installation of 180,000 aluminium tiles on the exterior of the building that appears to ripple with the wind. An existing floor was also converted to become a trading floor. The total cost of the refurbishment was in the region of £40 million, of which Debenhams contributed £25 million. The owner of the building, British Land, also contributed towards the cost. The refurbishment was due to be completed by February 2014.

The company's trading statement for the 17 weeks up to 28 December 2013 was released on 31 December 2013, and revealed a reduction in pre-tax profit from £115 million to £85 million. On 2 January 2014, the company's chief financial officer Simon Herrick resigned, following criticism of his financial decisions. On 13 January 2014 4.6% of Debenhams shares were bought by Sports Direct, the retailer run by Mike Ashley. The stock market purchase of 56.8 million shares (worth around £46m) was made without the prior knowledge of the Debenhams board. Sports Direct stated at the time it intends to be a supportive share holder. The Debenhams board responded by stating they are open-minded with regard to exploring operational opportunities to improve its performance. Sports Direct sold its shares on 16 January 2014, although they took out an option to buy further shares up to a total of 6.6%. In August 2017, it emerged that Ashley had secured 21% of the shares which gave him over 10% of voting rights in the company.

During 2017 Debenhams opened two new stores, one in Stevenage and one in Wolverhampton. The 80,000 sq ft Stevenage store was opened on 24 August 2017 at Roaring Meg Retail and Leisure Park by Celebrity fashion designer Julien MacDonald and local hero Jean Robinson, who had won a competition for the privilege. The store was the first to be designed under the vision of CEO Sergio Bucher, with a new layout and format with the emphasis on encouraging people to stay longer.
The second store to open during 2017 was the new 93,000 sq ft store at Wolverhampton's Mander Centre. The store was opened on 12 October 2017 as part of the centre's £35 million refurbishments, it was also Debenhams' first store in Wolverhampton. It was only the second to feature the new layout previously only seen in the Stevenage store, and only the second to feature the company's new deli-restaurant format Loaf & Bloom, only previously seen at Milton Keynes.

In February 2018, the company announced a reduction of up to 320 store management roles across the business by the end of March. Sports Direct increased its holding in the company to 29.7% on 2 March, just below the level whereby it would be required to submit a formal takeover approach.

Financial difficulties

After media speculation about Debenhams' survival, in 2018 the company announced the largest loss in its history, a pre-tax loss of £491 million, and the closure of up to 50 stores with the potential loss of 4,000 jobs.

On 9 April 2019, the company announced that they had gone into pre-pack administration.

On 26 April 2019, the company announced that in addition to rent reductions on all except 39 stores, 22 stores would close after Christmas 2019. This included the recently opened Wolverhampton store plus Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton-on-Tees, Walton-on-Thames, Wandsworth, Welwyn Garden City, Wimbledon and Witney.

On 6 April 2020, Debenhams confirmed it had filed a notice of intent to appoint administrators. CEO Stefaan Vansteenkiste said it was due to "unprecedented" circumstances caused by the COVID-19 lockdown and was to "protect hebusiness, ... employees, and other important stakeholders". On 9 April 2020, the company went into administration.

On 9 April 2020, Debenhams confirmed it planned to close 11 stores in the Republic of Ireland with immediate effect.

In April 2020, Debenhams closed seven UK stores and was set to close five more when Coronavirus restrictions were lifted. This included the Croydon store that anchored the Centrale shopping mall (previously the Drummond Centre) that Debenhams had acquired when they took over the Kennards chain of stores, bringing to a close a trading period of more than 150 years from that site.

In July 2020, Debenhams was set to abandon its property in Princes Street in Edinburgh, which it leased from Legal & General, in order to make room for a £50m hotel. In the same month, Debenhams put itself up for sale to prevent it going into liquidation, hoping to find a buyer by September. In August 2020, the company announced it was cutting 2,500 job positions as a result of the economic effects of the pandemic. The job cuts affected store management positions; sales managers, visual merchandise managers, and selling support managers were set to be axed. According to the company, "The trading environment is clearly a long way from returning to normal. Such difficult decisions are being taken by many retailers right now, and we will continue to take all necessary steps to give Debenhams every chance of a viable future." In September 2020, Debenhams put its seven store Danish chain, Magasin du Nord, up for sale. Magasin Du Nord was later sold to German department store Peek & Cloppenburg for £120 million.

On 1 December 2020, after the collapse of talks with Arcadia (which went into administration the previous day) and JD Sports over a potential rescue, Debenhams announced it was going into liquidation, putting 12,000 jobs in 124 UK stores at risk unless the administrators could find buyers for all or parts of the business. With the company in administration and on the verge of liquidation, on 6 December 2020, Mike Ashley's Frasers Group was reported to be in talks to acquire Debenhams, though it was later reported that Ashley was mainly interested in using empty Debenhams stores to expand his other chains, including House of Fraser, Sports Direct and Flannels; taking 'vacant possession' would avoid redundancy costs for existing staff.

On 13 January 2021, Debenhams announced it would permanently shut six stores in England due to the COVID-19 lockdown. They included the flagship Oxford Street store in London, plus those in Worcester, Weymouth, Staines, Harrogate and Portsmouth; the move involved 320 job losses.

On 25 January 2021, it was announced that Boohoo had bought the Debenhams brand and website for £55m, but did not retain any of the remaining 118 stores, meaning the loss of up to 12,000 jobs. Boohoo relaunched the website as Debenhams.com in April that year. On 5 May 2021, the liquidator announced that all remaining UK stores would close on 15 May 2021, marking the end of Debenhams as a department store retailer after 243 years.

Products and services

In 1993 the company introduced the 'Designers at Debenhams' brand, the creation of then CEO Belinda Earl, Ben de Lisi and Spencer Hawken. The idea introduced designer names and brands such as Jasper Conran, John Rocha, Butterfly by Matthew Williamson, H! by Henry Holland, Star by Julien Macdonald, Frost French, Janet Reger, Ted Baker, St George by Duffer, Jeff Banks, and Ben de Lisi. The company also started selling goods under a number of brand names that it owned. In 2010, Debenhams announced the launch of four new designer names to its fashion range; Jonathan Saunders, Preen, Jonathan Kelsey, and Roksanda Ilincic.

Stores also contained concessions whereby other retailers may trade. Brands in stores include Oasis, Coast, Phase Eight and Warehouse. In June 2014, the company announced a trial of Sports Direct concessions in its Harrow and Southsea stores, which if successful would be expanded to other stores. This followed the purchase of a stake in Debenhams by Mike Ashley, the owner of Sports Direct, in January 2014. Later that year, Debenhams also launched trials of Costa Coffee and Mothercare concessions within stores.

In October 2016, the company announced it would begin to focus less on clothing and more on food, beauty products and gifts. It also hired the former lighting buying team of collapsed rival BHS to begin introducing new lighting departments in stores. Debenhams followed this in December 2016 with a plan to discontinue its Betty Jackson Black ladies fashion brand, and significantly reduce its Jeff Banks menswear range in favour of expanding the Hammond & Co. brand.

The company operated retail websites in the UK and Ireland, as well as a mobile-enabled website and mobile apps that allowed customers to shop the online range and scan product barcodes in store.

Debenhams provided store card and credit card services, operated by NewDay. Insurance products were also provided under the Debenhams brand by other financial companies. Debenhams also operated bureaux de change in selected stores. The company ran a loyalty card programme, branded the Debenhams Beauty Club, where customers could collect points with the purchase of health and beauty products.

Former stores and franchises

United Kingdom, Denmark and the Republic of Ireland

As of December 2020, the company owned and operated 124 stores in the United Kingdom, and 7 under the Magasin du Nord brand in Denmark. Debenhams occupied the most sites of any of the traditional department store groups in the UK. The majority of the original trading names of the stores, in each of their respective locations, were replaced with the "Debenhams" name during the 1970s. All the department stores in the group traded as "Debenhams" (although the store in Chester was still dual-signed as Debenhams and Browns of Chester).

In April 2020, stores operated in the Republic of Ireland by Debenhams Ireland ceased trading with the loss of nearly 2,000 jobs.

International franchises

As of 2020, the Debenhams brand is used in 45 stores operating under licence in 17 other countries. In Middle East, its operating licence was held by Alshaya Group and is still operating to this day. It also operates Debenhams Cosmetics. In Malaysia, it operates at The Curve in Selangor and Gurney Paragon in Penang, also not impacted by the massive UK closure. In Philippines, it is operated by SSI Group, Inc., located at Shangri-la Plaza, Abreeza, and a shop-in-shop inside Rustan's Glorietta 3.

The Senayan City store in Indonesia closed on 31 December 2017, marking the brand's official exit from Indonesia.

Meanwhile, its only store in Australia, located in Melbourne's St. Collins Lane shopping centre, closed in January 2020 after 2 years of trading.

Debenhams opened a store in Sofia, Bulgaria located in the Bulgaria Mall in 2012, its 71st international store.

In September 2020, Debenhams Pakistan, located in Dolmen Mall Clifton, in Karachi, shut its doors in Pakistan after nine years.

References

External links

* – official site

Debenhams
– corporate site
*

{{Authority control

1778 establishments in England
2020 disestablishments in England
British companies disestablished in 2020
British companies established in 1778
Companies formerly listed on the London Stock Exchange
Companies that have entered administration in the United Kingdom
CVC Capital Partners companies
Defunct retail companies of the United Kingdom
Kamani family
Private equity portfolio companies
Retail companies disestablished in 2020
Retail companies established in 1778
Defunct department stores of Australia
Defunct department stores of the United Kingdom
Companies that filed for Chapter 11 bankruptcy in 2020