Debenhams closing Wolverhampton's Mander Centre store putting jobs at risk
Debenhams has confirmed plans to shut its store in Wolverhampton's Mander Centre delivering a devastating blow to the city.
The department store chain today revealed it will close up to 22 outlets across the country by 2020, putting 1,200 jobs at risk.
Birmingham's Debenhams at The Fort Shopping Park has also been named as one of those to close.
Staff were told of the plans this morning with Wolverhampton's store opening late.
WATCH: Shoppers speak out
It had 150 staff in Wolverhampton when the flagship outlet opened.
Debenhams was the centrepiece of the Mander Centre's massive £35 million revamp.
Store bosses have earmarked 50 stores in total to close.
Plans for others spared the axe in the first round of closures have yet to emerge.
Bosses say all stores will remain open throughout 2019, including through the peak Christmas period.
Debenhams also has branches in The Old Square in Walsall, Merry Hill at Brierley Hill, Kidderminster, Lichfield and at the Bullring in Birmingham.
Wolverhampton Council today said it would work with Mander Centre owners Benson Elliott and Debenhams on 'alternatives' to closure.
Wolverhampton stunned by Debenhams closure
Leading politicians and business figures have expressed their sadness at the news today.
Wolverhampton North East MP Emma Reynolds, said: "This is hugely disappointing news and a real blow for the city.
"Debenhams has been a great addition to the new Mander Centre and it is sad to hear that we are going to lose it – particularly for the staff.
"I hope there is something we can do to change the company's mind."
West Midlands Mayor, Andy Street, speaking to the Express & Star two weeks ago, had been optimistic that the store would remain open.
But following today's news he tweeted: "Very surprised and saddened to see Wolverhampton and The Fort on this list of closures next year.
"Debenhams will be a particular loss to Wolverhampton after only opening a couple of years ago.
"My thoughts are with the staff affected."
Ninder Johal, board member of the Black Country Local Enterprise Partnership (LEP), said the closure was not "a Wolverhampton problem".
"This is terrible news and finding a major retailer to replace Debenhams will be no easy task, but there are issues with retail all over the country and we should not look at this in isolation," he said.
"We can see from the fact that Debenhams are closing a number of stores that this is very much a national problem."
Black Country Chamber of Commerce director of external affairs, Neil Anderson, said: "18 months ago we all celebrated the opening of Debenhams Wolverhampton as it demonstrated a renewed in confidence for the prospects of the region’s retail sector.
"It is therefore extremely sad to hear that less than two years later this decision has been reversed.
"There is still a degree of uncertainty around the future of other leading department stores and trading remains competitive and challenging in places.
"We are passionate about continuing to champion the retail sector within the Black Country and understand that these are worrying times for those Debenhams employees affected by the announcement and the Chamber will continue to work with partners and stakeholders to promote new employment and training opportunities for local staff."
Liberal Democrat campaigners in the city called on the council to set up a 'Task Force' of senior staff, business leaders and cross party politicians to discuss the way forward.
The Liberal Democrats have also called on the council to work with partners such as Department for Work and Pensions (DWP), Job Centre Plus, Department for Business, and Local Enterprise Partnership, as it did when BHS closed its doors for business with the majority of its staff helped to find alternative retail roles.
Campaigner Nick Machnik-Foster said: "This is a devastating moment for the city but we must first and foremost think about all the staff affected and their families.
"We cannot have more empty shops in the city and I am urging the council set up a task force today to make sure Wolverhampton is knocking on the door of government, of the business and of anyone who will listen; making sure everything that can be done, is done."
Council vow on Debenhams talks
Isobel Woods, the City of Wolverhampton Council's Head of Enterprise, said: “Today's announcement highlights the significant restructuring that is taking place across our high streets nationally brought about by fundamental changes to the way people now shop.
"The decision by Debenhams’ Board won’t take effect until next year, so the council and Benson Elliot, owners of the Mander Centre, will be engaging with the company to explore alternative scenarios. However, as it stands at the moment, this is sad news for everyone who works at our local store.
“We are liaising with our partners and the store to understand the implications on the employees affected, and the implications on our wider retail sector. We will of course provide support when and where it’s needed, and we do have a track record of supporting people into other jobs and working with business to overcome challenges.
"Although the timing has been a shock, we have been closely monitoring the national situation.
"Changes in consumer demand have seen some high street brands succeed where others have struggled and we are fortunate that a number of successful big names including H&M, New Look, B&M and Matalan have recently opened or will be shortly opening new stores in the city centre.
“Indeed, Benson Elliot announced plans last month to let over 105,000 square foot of new retail space to four new, well-known brands.
“We have spoken to colleagues at Benson Elliot today and we will be working closely with them over the coming months to develop economically viable plans.
“As a council we have been very much alive to the challenges our city centre and its high street has been facing. We have been working with city partners for some time working on ambitious plans to rethink and reimagine our city centre, shifting the dependence on retail.
“One billion pounds is being invested including in some fantastic leisure-led developments such as Westside, the Civic Halls and the redevelopment of Molineux Stadium along with huge investment in great connectivity, great public spaces, great new homes, a great new events programme, outstanding arts and culture, and a thriving commercial district.”
Crowds flocked to Wolverhampton's new Debenhams
More than 2,000 people arrived on the opening day for the Mander Centre store in October 2017.
WATCH: How shoppers greeted the store opening
The much-anticipated opening of the 93,000 sq ft department store saw shoppers waiting to get inside for up to two hours before the ribbon was cut.
Cheers rang out as former Wolves centre back Jody Craddock helped cut the ribbon at 10am, prompting a rush of shoppers inside to check out the clothes, perfumes, toys, foods and everything else on offer.
Mander Centre manager Richard Scarenguivel said at the opening: "This is a real coup for us and we are honoured to be working with Debenhams.
"The store is beautiful and the amount of people who have turned up for its opening day is fantastic."
The Mander Centre is yet to comment on the closure plan.
Why is Debenhams closing stores?
Both Wolverhampton and The Fort have fallen victim of a restructuring and turnaround plan by the chain.
Earlier this month Debenhams rejected a £150 million rescue offer by tycoon Mike Ashley's Sports Direct.
Just last year Mike Ashley and the property team at his Sports Direct company sealed a deal to save Wolverhampton's iconic Beatties.
Mr Ashley took over Beatties' parent company House of Fraser in October 2018.
In a statement today, Terry Duddy, Executive Chairman of Debenhams, said: “The issues facing the UK high street are very well known.
"Debenhams has a clear strategy and a bright future, but in order for the business to prosper, we need to restructure the group’s store portfolio and its balance sheet, which are not appropriate for today’s much changed retail environment.
"Our priority is to save as many stores and as many jobs as we can, while making the business fit for the future.”
Of its 166 stores, Debenhams will retain 39 at current rents.
Rent reductions ranging from 25 per cent to 50 per cent will be sought on more than 100 others.
The group is planning two company voluntary arrangements – one relating to Debenhams Retail, the main trading entity, and the other to Debenhams Properties.
Debenhams went into administration on April 9 and it was sold to new company Celine UK NewCo 1.
Its new owners, which include Barclays and Bank of Ireland, as well as US investment firms, have launched the store-closure programme via an insolvency process known as a company voluntary arrangement (CVA).
Some of the group’s financial creditors recently provided £200 million of fresh cash for the group.
A financial update issued by Debenhams Group today for the half year to March 2 showed sales down 5.3 per cent to £1.56 billion on a year before.
Earnings before tax were down 36.3 per cent to £65.9 million and group net debt stood at £417.4m.
Future was bright for Debenhams in Wolverhampton
It was a morning of celebration for the city, with many predicting that the opening of Debenhams would provide a major boost to shopping in Wolverhampton.
But now that dream appears to be in tatters with the plans revealed which could see the store close next year.
Debenhams opened on the site of the former TJ Hughes and Tesco, in a revamped three-floor department store with new escalators, cafe and restaurant.
Plans to close the well-known TJ Hughes store came in 2011 and the store stood empty for several years.
Contractors Bowmer & Kirkland worked on the structural transformation of the four-floor building.
Debenhams started a 17-week interior fit-out to transform the empty shell.
There was a two-week period to bring in new stock before the shop's grand opening in October 2017.
It was the second flagship store under the then Debenhams chief executive Sergio Bucher who wanted to create a new shopping experience.
No longer were departments sorted by types of clothing, instead they were laid out by entire outfits - for designer clothes, occasions and outdoor.
The store features larger changing rooms with three mirror-side lighting options - work, outdoors and dinner.
And instead of the standard Debenhams restaurant seen in Birmingham and Walsall, the store boasts the deli Loaf and Bloom restaurant.
A 90-seat Costa Coffee is also open inside.
The new concept of store has only been used by Debenhams in its Stevenage shop.
Earlier plans had seen Debenhams signed as the anchor store of the £300m Summer Row development in the mid-2000s.
But after plug was pulled on the Summer Row transformation by 2011 after the economic downturn.