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Gloucestershire Business News

Debenhams faces closure as rescue talks collapse

Debenhams faces closure, with the potential loss of 12,000 jobs, after the collapse of talks to buy the troubled retailer from administration.

But Gloucester City Council leader Councillor RIchard Cook said any closure in the city would not affect the King's Square development alongside the city's store.

JD Sports, which had been the last remaining bidder for the department store chain, withdrew from negotiations to buy Debenhams.

Their decision follows the Arcadia Group - which includes Burtons, Topshop, Miss Selfridge and Dorothy Perkins who operate concessions in Debenhams - entering administration last night.

Debenhams' 124 UK stores will be able to reopen tomorrow alongside its online operation to clear current and contracted stocks.

But administrators FRP Advisory said if no alternative offers have been received at the end of that process, the company's UK operations will close.

Joint administrator Geoff Rowley 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."

The administrator assured landlords, suppliers and partners that all contractual obligations entered into during administration would be met in full.

Mr Cook said: "I can't say this is really unexpected but it is still really sad news, that it is happening just before Christmas is even more sad.

"Our thoughts are with those employees who could be losing their jobs especially at this time of year. We will be working with Jobcentre Plus and other agencies to support those at risk at this difficult time.

"I don't think it will make any difference to our plans for King's Square."

He said the council has been in touch with the building's owners Aviva about possible uses of the space.

"I'm aware people have approached Aviva about the building," he said. "There are opportunities for developers to buy the building and do other things with it. 

"We will be focused on ensuring that it doesn't stay empty but reflects our ambitious plans for the city with possible alternatives including it being used for residential and or leisure uses."

Councillor Jeremy Hilton, leader of the Liberal Democrat Group on the council, described the announcement as "dreadful news for our city centre".

He said: "Debenhams is the anchor for King's Square and with the refurbishment of King's Square just started the last thing we need is an empty department store.

"The leader of the council and the Conservative administration must do all they can to ensure that the site remains an integral part of the shopping experience in the city and continues to trade as a department store."

And Labour Group leader Councillor Kevin Stephens said it was a "major body blow to Gloucester".

He tweeted: "My heart goes out to the thousands of shop workers who face losing their jobs in the run-up to Christmas.

"I have written to the council's managing director suggesting an emergency task force to draw up plans and come up with proposals as to how we take this forward."

Debenhams, which has been a fixture on high streets for 242 years, entered administration for the second time earlier this year and has cut around 6,500 jobs since May.

Restructuring specialist Hilco was called in three months ago to work on a possible liquidation.

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