It feels like not a week has gone by this year without speculation on the future of Debenhams, and this week was no different as rumours mount that it is heading towards a company voluntary arrangement (CVA).
It comes just a few months after the embattled department store chain announced plans to close 50 stores, and a week after it revealed it is making up to 60 roles redundant at its London head office and Taunton support centre.
Now, the speculation is that Debenhams – which is late to the game when it comes to making essential structural changes – is realigning its property portfolio to ready for a CVA.
Meanwhile, the spectre of Mike Ashley looms. He has already wielded the significant power of his almost 30% stake in Debenhams by voting to remove chairman Sir Ian Cheshire and chief executive Sergio Bucher from the board at the most recent annual general meeting, leading to Cheshire’s resignation. Ashley is no doubt ready to swoop in and increase his stake in the business, should the opportunity arise.
Debenhams has long been in trouble, and after a decade of underinvestment it looks like it is about to reach the end of the line. The retailer has described fashion and beauty as “weak areas”, which is evident. It does not have a focused fashion offer and, despite working with several successful third-party brands, the product can often look exactly that – weak.
Debenhams has failed to give shoppers a reason to shop in its stores. Although the Stevenage branch garnered a positive reaction when it opened in August 2017, and the Watford store opened as the first Debenhams Redesigned location last autumn, most look outdated and mediocre at best.
In today’s market, innovation and a clearly defined brand proposition are key, but Debenhams has not made advances in either area. Particularly in the highly competitive womenswear sector, it has not given shoppers a reason to spend their money.
Customers are looking for newness, quality and an enjoyable shopping experience, through excellent customer service, the seamless use of technology and, most importantly, a great product offering. Unfortunately for Debenhams, it has been left behind on all fronts.