The future of the five Debenhams stores in Northern Ireland could come under scrutiny after the department store chain announced potential cuts.
Sergio Bucher, the chain’s new boss, unveiled plans to close 11 warehouses and put up to 10 of the firms 176 UK shops under review.
Northern Ireland has five Debenhams stores, employing a total of around 500 people out of a UK workforce of 19,000.
Its stores in the province are located in shopping centres Rushmere at Craigavon, the Quays in Newry, Ballymena’s Fairhill, Belfast’s CastleCourt and Londonderry’s Foyleside.
There were no details of where closures could take place among its 176 stores.
The company’s interim results and strategy review said none of the stores were making a loss but that up to 10 would be reviewed over the next five years if they did “not meet our required return thresholds”.
A spokesman said: “Debenhams’ chief executive announced its interim results and future strategy… which includes looking at the store estate. Whilst it is stated that up to 10 stores will be considered for closure over the next five years, there will not be any immediate implications for any of the stores. At the same time, we continue to open a small amount of stores in selected locations.”
Economist Andrew Webb, who is also chairman of Belfast City Centre Management, said the company had failed to respond to changes in retail habits, and may have opened too many stores.
“They were a bit slower off the mark with online retail, which has impacted on their growth and profitability, as they are carrying the weight of more stores than they probably need.
“Their stores are also overdue on a refresh and refit.”
And with none of the stores making a loss, he said “the announcement seems to be more about getting into shape to survive in an era of online retail”.
But he said he did not believe that the company was disadvantaged by its Belfast location in CastleCourt Shopping Centre in Royal Avenue, a short distance from the renewed retail activity centred on Victoria Square: “As a major anchor tenant in a shopping centre that appears to be close to full occupancy and provides convenience in terms of on-site parking and proximity to public transport, I would suggest that it is enjoying a prime location.”
Mr Bucher, who took over last October, outlined an overhaul that will see the group shut one of its three distribution centres run by DHL and 10 smaller in-house warehouses.
It’s understood the warehouse plans will not have an impact in Northern Ireland. The DHL warehouse employs 220 staff and will shut in two years’ time, but Debenhams hopes to be able to redeploy many staff affected by the smaller warehouse closures.
Details of his plans came as the group announced a 6.4% drop in pre-tax profits to £87.8m for the six months to March 4.
Debenhams is also looking at trialling departments that will tie up click and collect with personal shopping services in the autumn, while also considering…