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UPDATE 1-UK retailer Debenhams sheds 2,500 jobs in latest blow to stores sector

Tue, 11th Aug 2020 13:14

(Adds details)

LONDON, Aug 11 (Reuters) - Struggling British department
store chain Debenhams is to cut a further 2,500 jobs, dealing
the latest blow to the country's battered retail sector from the
COVID-19 crisis.

Debenhams shed hundreds of head office jobs in May and its
latest round of redundancies adds to thousands already announced
by major British retailers, including Marks & Spencer,
Boots, John Lewis and WH Smith.

Official data, also published on Tuesday, showed the number
of people in work in Britain has suffered the biggest drop since
2009 and signs are growing that the coronavirus will take a
heavier toll on the labour market as the government winds down
its huge job-protection scheme.

“We have successfully reopened 124 stores, post-lockdown,
and these are currently trading ahead of management
expectations," Debenhams said in a statement.

"At the same time, the trading environment is clearly a long
way from returning to normal and we have to ensure our store
costs are aligned with realistic expectations."

It said it would take "all necessary steps" to give
Debenhams every chance of a viable future.

In April, Debenhams went into administration for the second
time in a year, seeking to protect itself from legal action by
creditors during the crisis that could have pushed it into
liquidation. The retailer is owned by a lenders' consortium
called Celine UK NewCo 1 Ltd that includes U.S. hedge fund
Silver Point Capital.

Last month Debenhams, assisted by investment bank Lazards,
started a process to assess ways for the business to exit
administration.

It said there were a range of possible outcomes, including
the current owners retaining the business, new joint venture
arrangements with existing and new investors or a sale to a
third party.

That process is due to run until the end of next month.

Debenhams' latest job cuts were first reported by The Sun.
(Reporting by James Davey; editing by Stephen Addison)

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