History and Intro
Debenhams was once a household name in the UK, a beloved department store that offered a wide range of products and services, from fashion and beauty to home and travel. It was founded in 1778 by William Clark, who opened a drapers store in London. The store soon expanded and became known as Debenhams after Clark partnered with William Debenham in 1813. The store grew into a national chain, with over 200 stores across the UK and Ireland, and also ventured into international markets, such as Australia, Denmark, and the Middle East. This company was also a pioneer of online retailing, launching its website in 1997 and becoming one of the largest online retailers in the UK.
Fall of an Icon:
This company used to be a retail icon with 25,000 employees in 2019. However, their success story came to a tragic end in 2021, when the company announced the closure of its remaining 118 stores, after failing to find a buyer. This department store giant had been struggling for years, facing a series of challenges that ultimately led to its demise. Some of the reasons behind Debenhams’ decline and downfall are:
Failing to keep up with fashion trends and online shopping habits:
Their stores were accused of being outdated and boring, offering bland and generic products that did not appeal to modern and demanding consumers. It also failed to invest in its online platform, which was slow and awkward and did not offer the same level of convenience and choice as its competitors, such as ASOS, Boohoo, and Amazon. If you want to read more about ASOS you can click on the link.
Having too many underperforming and costly stores:
Debenhams had a large and expensive store estate, which was difficult to maintain and operate, especially during the pandemic and lockdowns. They had to pay high rents and rates, and also deal with declining footfall and sales, as more customers shifted to online shopping. The company tried to reduce its store portfolio, but it was too little, too late, as it could not generate enough cash to pay off its debts and creditors.
Facing tough competition from new and new brands:
Debenhams faced cut-through competition from new and emerging brands, such as Primark, Zara, and H&M, which offered fast and affordable fashion, and also from online-only brands, such as PrettyLittleThing, Missguided, and Nasty Gal, which offered trendy and edgy styles. They could not match the quality, variety, and price of these brands, and also lost their loyal and core customers, who were looking for something different and exciting.
Being hit hard by the pandemic and lockdowns:
The company was already in a precarious situation before the pandemic, but the Covid-19 crisis was the final nail in the coffin. They had to close their stores for several months, losing millions of pounds in revenue and customers. It also had to deal with the disruption of its supply chain, the cancellation of orders, and the increase in online returns. They tried to survive by securing a rescue deal with JD Sports, but the deal fell short when, one of Debenhams’ main suppliers – Arcadia, went into administration. As they couldn’t pay their debts. The company had no other option but to liquidate its assets and close its doors for good.
The Impact of Debenhams Closure
The exit of this giant from the high street has significant implications for the retail sector and the society at large, such as:
The loss of jobs and customers:
The company employed over 12,000 people, who lost their jobs and livelihoods as a result of the closure. They also had millions of customers, who lost their favorite shopping destination and their loyalty points and vouchers. The company’s closure also affected its suppliers, concession partners, and landlords, who lost their contracts and income.
The impact on the retail industry and the future of department stores:
The lock on their stores left a huge gap in the retail market, especially in the department store segment, which was already shrinking and struggling. Their closure also left many empty and vacant spaces in the high street and shopping centers, which could lead to further decline and decay of the physical retail environment. Their closure also raised questions about the viability and relevance of department stores in the digital age, and whether they can adapt and survive in the changing consumer behavior and preferences.
The potential opportunities for other retailers:
Debenhams’ closure also created opportunities for other retailers and online platforms, who could benefit from the increased market share and customer base. Some of their former rivals, such as Next, Marks & Spencer, and John Lewis, could capitalize on their expiration and attract their former customers by offering similar or better products and services and expanding their online and physical presence. Some of Debenhams’ former competitors, such as Boohoo, ASOS, and Frasers Group, could also take advantage of Debenhams’ closure to acquire some of its brands and assets and use them to enhance their own portfolio and reach. Boohoo bought their website and other rights for 50 million pounds.
Conclusion:
Debenhams was a British icon, a retail giant that had a long and illustrious history, and a loyal and devoted following. They were also a victim of their own success. Debenhams was like a retail dinosaur that failed to evolve and innovate and became the victim of a casualty of the pandemic and the online revolution. Their rise and fall is a cautionary tale for the retail industry, a reminder of the importance of staying relevant and competitive, and a reflection of the changing times and tastes of the consumers.
