Boohoo buys Debenhams for £55 million but all shops will close for good
Fast fashion retailer Boohoo has acquired the Debenhams brand and website for £55 million after JD Sports pulled out of a rescue takeover back in December.
The Manchester-based retailer will relaunch the 242-year-old department store as an online-only operation next year without taking on its current staff, calling it a 'transformational deal' and a 'huge step'.
While it will keep Debenhams' presence alive online, it will sadly see the closure of the high street retailer's remaining stores, resulting in thousands of job losses.
'This is a transformational deal for the group, which allows us to capture the fantastic opportunity as ecommerce continues to grow. Our ambition is to create the UK's largest marketplace,' says Boohoo's executive chairman, Mahmud Kamani.
'Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion ecommerce, but in new categories including beauty, sport and homeware.'
Back in April 2020, the department store formally announced it was filing a notice of intent to appoint an administrator for the second time, after all of its UK stores temporarily closed amidst the ongoing coronavirus (COVID-19) pandemic.
Debenhams is already in the process of closing down, after failing to secure a deal to rescue its 118 remaining stores and 12,000 staff members. Recently, the store announced that six of its shops would not be reopening after lockdown, including its flagship store on London's Oxford Street.
Geoff Rowley, who was appointed as the store's joint administrator in December, said: 'All reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.
'The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.'
Geoff continued, thanking the 'efforts of the management team and staff' who have worked 'so hard throughout the most difficult of circumstances' to keep the business trading.
He added: 'We would also like to thank the landlords, suppliers and partners who have continued to work with Debenhams through this turbulent period and can reassure them that all contractual obligations entered into in the administration period will be met in full.'
Debenhams was sadly already struggling prior to the coronavirus outbreak. Last April it fell into the hands of its lenders after struggling to keep up with competition from rivals, which led to the closure of more stores.
Elsewhere, earlier last year British retailer Laura Ashley announced it had gone into administration, while Topshop owner Arcadia also collapsed into administration, putting 13,000 jobs at risk.
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