Debenhams could reportedly close one-third of its stores as part of cost-cutting efforts. Credit: Martin Pettitt

Following a tough trading period, UK department store Debenhams could close up to one-third of its stores as part of its restructuring plan.

Sources familiar with the matter have told City AM that department store’s new finance chief Rachel Osborne is considering closing up to a third of its 166 stores.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

However, the exact number of store closures depends on the conversations between Debenhams and landlords.

The department store is reportedly looking to save £30m by cutting the dividends, and £70m by reducing capital expenditure.

Debenhams is expected to announce the details of its restructuring plan alongside the full-year results on Thursday.

So far, Debenhams has issued three profit warnings this year, blaming ‘increased competitor discounting and weakness in key markets’ for the fall in profits.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Kelkoo CEO Richard Stables said: “Debenhams’ woes are another indication of how high street retailers are struggling to survive in an increasingly competitive retail landscape. Maintaining a portfolio of dozens of under-performing or loss-making stores is simply no longer a viable option as consumers increasingly value customer experience and better value.”

“However, shareholders will be buoyed by the news of strong online growth suggesting that the retailer faces a brighter future if this continues. Retailers have to invest in a coherent online offering and harness the opportunity of omnichannel marketing in order to thrive.”

In a statement issued last month to investors, Debenhams has said that full-year profit would be around £35m, down from £95.2m the previous year.

Debenhams CEO Sergio Bucher said: “The market environment remains challenging and underlying trends deteriorated through the summer months. Nevertheless the product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity ahead of peak.

“Having put in place a leaner operational structure and strong leadership team, and taken action to strengthen our financial position, we are well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge.”

Debenhams chairman Sir Ian Cheshire said: “As we stated in June, the board continues to work with its advisers on longer-term options, which include strengthening our balance sheet and reviewing non-core assets. This activity is in order to maximise value for shareholders and protect other stakeholders, including our employees.”

Debenhams is currently in the middle of trying to sell its Danish department store Magasin du Nord, which could bring the retailer in around £200m.