The lethal force of the Covid-19 outbreak unleashed on the world in 2020 has killed to date in excess of seven million people globally (worldometers.info). In addition to this great toll of human life the pandemic and the ensuing commercial lockdown had a deadly effect on struggling businesses. One such victim is Debenhams plc, a retailing national institution with a continuous history centuries old. The British high street retailer went into liquidation and irrevocably out of business in May 2021, drawing the curtains on a trading lifespan extending back nearly 243 years.

Debenhams, the world’s oldest department store, was an iconic brand with a trusted reputation, a staple for household goods, beauty brands and clothing. The department store titan was bought out of administration by online fashion retailer Boohoo for £55m with the purpose of its famous brand being reinvented as an online bazaar – which is an ironic outcome given that Debenhams’ reluctance to refocus its sales strategies around the online platform (see below ).

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Debenhams was founded by William Clark in 1778 as a drapers’ store in Wigmore Street, London. In 1813 Clark partnered with investor William Debenham, trading as Clark and Debenham in London and Cheltenham. After Clark retired Debenham partnered with Clement Freebody in 1851 (under the name Debenham and Freebody). Into the 20th century the company was still in the hands of William Debenham’s descendants and in 1920 acquired upmarket Knightsbridge department store Harvey Nichols. Debenhams experienced a business crisis in the late 1920s involving its subsidiary Drapery Trust, the fallout of which forced then owner Ernest Debenham to sever his family’s connections with the retail chain that still bears his name…as a result the company went public.

Era of expansion: The 1930s and 40s saw considerable expansion for Debenhams, becoming the biggest department store chain in the UK by 1948, with takeovers in several British cities (in 1950 there were 110 stores in the UK). In the 1970s Debenhams found itself in more volatile waters, having to fight off takeover attempts, culminating in it being acquired by the Burton Group in 1985 (subsequently the two demerged in 1998). From the 1990s the retail company took on an international profile with stores opening in 18 countries. Debenhams stores spread to Ireland as well as acquiring the Danish department store chain Magasin du Nord, plus a raft of widespread franchises encompassing the Middle East, Asia, Malta, Russia, Australia and elsewhere.

Profits decline while debts inflate: The Covid pandemic put the shutters on Debenhams’ retail existence but the decline of the household name in British retailing can be traced to business failures and wrong strategies over the preceding two decades. The decline had been precipitous, in 2016 the 166–store strong chain had been worth £900m, just three years on, this had plummeted to £20m. Retail analysts attribute Debenhams’ demise in part to its failure to read the future, to embrace change in consumer preferences resulting from the advent of the iPhone and online shopping. Simon Reynolds, a branding consultant, skewers management for neglect of the company’s historic brand – missing in Debenhams was a “clear brand proposition for its customers…it couldn’t demonstrate what made it different to its competitors and it lacked relevance to younger customers”. Debenhams’ expansion plans in 2006, its stated intention to double the then 120 stores it operated𖤓, added an additional cost burden§ which failed to be offset by a sales revenue boost (sales remained static in fact). This down-spiralling trend, according to retail consultant Richard Hyman, demonstrated that Debenhams had lost its relevance in the competitive retail environment (‘Debenhams: Three things that went wrong’, Rebecca Marston, BBC News, 09-April-2019, www.bbc.com). The end was nigh.

 

𖤓 in 2017 when it should have been closing underperforming stores, and just one year before a record loss toppled Debenhams into administration, the company inexplicably was still opening new stores! Poor store placement was a negating factor as well, opening new stores in small population areas like Stevenage or too close to existing Debenham stores was symptomatic of the injudicious path taken by the retailer (‘One ‘reckless’ decision that killed UK retail giant Debenhams’, Benedict Brook, News.com.au, 21-May-2021, www.news.com.au)

§ a combination of prime-site large properties, big rents and long leases, high rates and large staffing needs