Colchester Debenhams at risk of closure after JD Sports pulls out of rescue talks

The future of the town centre's Debenhams has been in doubt since the national chain went into administration back in April. 

There was talk that JD Sports could step in and take over the troubled company, providing a lifeline to thousands of employees. 

But it has now been confirmed that the sports-fashion chain, which was the last remaining bidder, has now pulled out of negotiations, putting 12,000 workers at risk.

In a brief statement to the London Stock Exchange, the company said: “JD Sports Fashion, the leading retailer of sports, fashion and outdoor brands, confirms that discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”

Debenhams has already cut 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.

It is understood that the collapse of the deal is partly linked to the administration of Arcadia, which is the biggest operator of concessions in Debenhams stores.

Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.

Some 13,000 staff of Sir Philip Green’s Arcadia Group face an anxious wait following the business collapsing into administration.

The high street giant, which includes the Topshop, Dorothy Perkins and Burton brands, has hired Deloitte to handle the next steps after the pandemic “severely impacted” sales across its brands.

Many of Arcadia’s staff worked at its brands’ concessions in Debenhams, which is itself hoping for a rescue deal after sliding into insolvency earlier this year.

Debenhams’ future is now in doubt, with JD Sports expected to pull out of talks to rescue the department store.

Arcadia, which runs 444 stores in the UK and 22 overseas, said 9,294 employees are currently on furlough.

No redundancies have been announced as a result of the appointment and stores will continue to trade, the administrators said, with many due to reopen on Wednesday when England’s lockdown is lifted.

Ian Grabiner, chief executive of Arcadia, said: “This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.

“The impact of the Covid-19 pandemic, including the forced closure of our stores for prolonged periods, has severely impacted on trading across all of our brands.

“Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the group in the hope that we could ride out the pandemic and come out fighting on the other side.

“Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”