Debenhams has announced that five of its stores will not reopen post lockdown, paving the way for Next to launch new beauty outlets.
The department store chain said today it could not agree a deal with shopping centre owner Hammerson, the landlord of the five locations, after the retailer fell into administration in April.
The five stores are in Bullring in Birmingham, The Oracle in Reading, Centrale in Croydon, Highcross in Leicester and Silverburn in Glasgow and their closures are expected to result in more than 1,000 jobs losses.
This follows the announcement of seven store closures last month.
As a result of today’s news, Next has now struck its own deal with Hammerson to launch a new concept store called ‘The Beauty Hall from Next’ in these five units.
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Debenhams said: “We can confirm that, despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres and so they will not be reopening.
“We continue to engage in constructive talks with our landlords and have agreed terms on the vast majority of our stores which we look forward to reopening when government restrictions allow.”
The historic retailer entered administration on April 9, appointing FRP Advisory to oversee the process and casting a shadow over the future of its 22,000 staff.
The retailer previously said it had struck deals with landlords to continue trading at 120 of its 142 UK stores.
But it announced in April that sites in Leamington Spa, Salisbury, South Shields, Stratford-upon-Avon, Truro, Warrington and Westfield in west London would not be reopening after the coronavirus outbreak.
The Beauty Hall from Next is a new direction for the Leicester-based listed company which describes it as a “premium beauty retail format”, aimed at creating complementary lines already offered via its website.
It said it saw the opportunity to develop an extensive premium beauty business following an online collaboration with Fabled by Marie Claire in 2018 and its subsequent acquisition of Fabled from Ocado last year.
Next currently sells more than 200 beauty brands online.
The new beauty halls will operate in the main entrance areas of the five former Debenhams stores with Hammerson pursuing other opportunities for the remaining vacant space.
Next said it was also in discussions on a small number of other sites and expected to hire former Debenhams staff to work in these new stores.
Chief executive Simon Wolfson said: “This is an exciting opportunity to work with existing and new beauty brand partners to create a new force in beauty retailing, bringing our online business to life through premium store environments in some of the UK’s most important retail locations.”
Hammerson has previously stated that it is adopting a strategy of repurposing its space which is let to department stores.
Chief executive David Atkins added: “This is a challenging time for all of us so it’s really encouraging to see strong, innovative brands like Next work with us to plan for the future.
“This is the right decision not only for consumers but for our communities more broadly as it will create employment prospects and support local economies all over the country.
“This is another example of how we are repurposing department store space and improving the shopping experience for consumers.”