Debenhams closing down it’s stores; Also Topshop, Topman and Miss Selfridge

Now we know for sure that all Debenhams stores will be closing down. The company is being bought by Boohoo who will operate Debenhams as an online business, after closing the stores. The Debenhams website currently receives 300m visits a year from UK customers.

It’ a similar story for Topshop, Topman and Miss Selfridge in administration, which will be bought by Asos, with all stores closing down and the brands continuing to trade online.

The story looks set to be repeated with many High Street stores struggling. Boohoo still has almost £400m in cash reserves having increased sales by 36% as a result of lockdowns.

High Street fashion stores had hoped that December pre-Christmas sales would provide them with a boost. In the event December sales were only slightly higher than the November figures.

With a return to full business rates scheduled to resume in April and with £2.3bn of unpaid rents owed to landlords, more casualties are to be expected. Some landlords may close shopping centres if they are unable to cover their costs.

Already shop vacancy rates are 13.7%, ranging from 17.1% in shopping centres to 10% in retail parks. One store in 50 has permanently closed during the last two years. Larger shopping units are worst hit, their owners finding it most difficult to find replacement tenants.

Sales at High Street fashion locations have been badly hit, with a reduction of 25%, while total clothing sales have increased as a result of online.

Online sales present challenges to clothing retailers. 17% of online items sold are returned compared with less than 12% of purchases from the High Street. That presents challenges, not only to the stores, but also to delivery companies like Royal Mail.

Even after te poor sales figures for December, stores expect £360m worth of post christmas returns.

The Washington Post looked at the growth of online shopping in the USA and found that the greatest increase was among people in their 60’s, 70’s and 80’s. Traditionally suspicious of online shopping, during lockdown they found it easier than expected,and while COVID fears persist, have found that they actually prefer it to visiting the stores themselves.

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