Rescue deal hope for Wolverhampton's Debenhams amid downsize plan

Talks are under way about the possibility of the retail giant downsizing its huge three-floor department store in order to give it a viable future.

It has sparked hope that Debenhams could join Beatties in being another major city retailer to be saved from a perilous position.

Senior officials in Wolverhampton and business experts believe moving forward with a smaller store could be a realistic option for Debenhams.

Its decision to close the store less than two years after opening as the centrepiece of the revamped Mander Centre attracted widespread derision.

Mander Centre bosses are now locked in talks to try and find a way to secure a future for Debenhams in Wolverhampton, while MPs and West Midlands Mayor Andy Street have also pledged to support the cause.

Debenhams is now in the hands of its lenders after falling into administration in April, which could make negotiations more tricky.

Creditors put another nail in the coffin earlier this month when they voted overwhelmingly to back a proposal to shut 22 stores, including the one in Wolverhampton.

However, Mander Centre officials are still trying to make a deal happen, with a smaller store believed to be the most likely way of Debenhams staying.

The former leader of Wolverhampton Council, Roger Lawrence, said he was aware of “high-level discussions”, while the Mander Centre said it was “exploring alternative scenarios” for Debenhams in the city.

Councillor Lawrence said: “There are a number of different options being explored and I hope it leads to an option that will be successful.”

Could a deal be in store?

One of the options being explored is the retailer occupying a smaller space in the Mander Centre – either by reducing its three floors or moving to another unit.

It is not clear whether Debenhams bosses favour this plan but it is felt by senior figures in the city that it could be a way of breaking the deadlock.

Debenhams declined to comment on the discussions but it is understood the retailer would consider any proposals put to it to make staying in Wolverhampton a more attractive proposition.

Mander Centre owner Benson Elliot is also keen for a breakthrough having funded a multi-million pound regeneration of the shopping centre, with Debenhams at its heart.

The loss of the anchor store less than two years after opening threatens to deal a huge blow to Mander Centre and the city.

Councillor Lawrence said: “I’m aware there have been some discussions going on over the last few weeks but I am not party to them. I hope very much something positive can come out of that.

“There are a number of different options being explored and I hope it leads to an option that will be successful.”

Councillor Lawrence believes downsizing could be the most attractive option to Debenhams.

He said: “There is a possible way forward with a reduction in size and re-letting part of the store, bringing it down from 90sq ft to 50sq ft there may be someone who wants another 40 sq ft.”

He added: “The difficulty you have got is if you are a department store in a shopping centre you normally get a good deal in the first place so I’m not entirely sure rental is key.

“I really hope there is some solution. We really have to ensure we do what we can to support local businesses.”

Pat McFadden, MP for Wolverhampton South East, is due to meet with Mander Centre managers in the coming weeks over Debenhams.

He said: “The announcement of the closure was particularly disappointing given the excitement that greeted the arrival.

“The first priority should be to explore with Debenhams, which is now owned by the creditors, whether there is any hope of them staying, even if that might mean a slightly smaller store than we have at present.

“If that’s not possible the situation we must avoid is having an empty, unused space at the heart of the Mander Centre.

“If a future for Debenhams cannot be secured then we must ensure we get an alternative use of the space it occupies. It is essential for the health of the Mander Centre and the city centre as a whole.”

West Midlands Mayor Andy Street said: “The problems facing retail and the local high street are well documented, and unfortunately Debenhams is a high-profile victim. The company had challenges adapting to the new digital age and online shopping, and stuck too rigidly to its expansion plans while shopping habits changed, leaving it with too many under-performing stores and a high level of debt.

“That being said I had hoped that the Wolverhampton store, which we must not forget is brand new and was designed for a long and profitable future in the city, would have been spared closure. Disappointingly that has not proved to be the case, which remains surprising given the other recent announcements of new tenants in the Mander Centre.

“However the store has not shut its doors yet and, although the situation is looking increasingly bleak, there is still time to make the case for it to remain open. Whether that involves offering Debenhams a smaller, more suitable unit in the centre or a better rent deal I am not sure, but all options should be explored. Wolverhampton Council and Benson Elliott - the Mander Centre’s owners - will be in discussions, and I will do everything I can to try and help."

Is downsizing the store key to its future?

Business expert Ninder Johal, a former Black Country Chamber of Commerce president, believes Debenhams could make a success of a smaller store in the city.

He said: “It is becoming quite clear that the retail landscape structure is changing. People are now spending more time online but still need that bricks and mortar experience to make the final purchase.

“Consequently showrooms don’t need to be as big as they used to be. That mix works really well.

“There are retailers who have got it right. Primark is an example. It has products that can be bought purely from the store.

“If Debenhams can create that experience in the store, though smaller, it might find it has a nice blend.”

Councillor Wendy Thompson, opposition leader in the city, echoed Mr Johal’s views.

She said: “This has happened with M&S a few years ago and Beatties where it took a floor out in order to make the rest of the store more viable. That is absolutely something that should be explored.

“I certainly hope Debenhams can stay. What Wolverhampton needs more than anything is a better choice of shops and to lose a shop like Debenhams would be very detrimental.

“It drives shoppers away rather than encouraging them to come in.”

The Mander Centre confirmed efforts were being made to try and convince Debenhams to stay.

It said in a statement: “We are in dialogue with Debenhams to explore alternative scenarios to re-shape its Wolverhampton offer to better fit its vision for the business going forwards.”

New Wolverhampton Council leader Ian Brookfield said: “Senior council officials are speaking with the owners of the Mander Centre, Benson Elliot, to discuss alternative scenarios for the Debenhams store.

“We will work closely with them and city partners to put together a solid proposition for Debenhams to consider.

“In fact, a letter has already been sent to Terry Duddy, Executive Chairman, at Debenhams, requesting an urgent meeting and reconsideration of the decision.

“We have also been speaking with training and employment providers to ensure we are in a position to support employees when and where it’s needed, and we do have a track record of supporting people into other jobs and working with businesses to overcome challenges.”

The 93,000 sq ft flagship store was designed as part of a new concept for Debenhams, mirroring a trial store opened in Stevenage.

No longer were departments sorted by types of clothing, instead they were laid out by entire outfits – for designer clothes, occasions and outdoor. The inclusion of Costa and a restaurant was also designed to encourage shoppers to turn their visit into an experience.

The Mander Centre store first opened in October 2017 and employs 150 staff. Huge crowds turned out for the opening, which had come after months of redevelopment.

Birmingham’s Debenhams at The Fort Shopping Park in Birmingham has also been named as one of those to close.

Bosses say all stores will remain open throughout 2019, including through the peak Christmas period.