Three of the biggest names in British retail – Debenhams, House of Fraser and Littlewoods owner Shop Direct – have been rocked by fresh turmoil as pressure mounts on the High Street.
In a ‘savage’ management cull, department store chain Debenhams is said to have pushed out directors who have been there for more than a decade.
It is not known exactly how many people have left but it is understood that one department has seen staff numbers slashed from 60 to 12.
Department store chain Debenhams is said to have pushed out directors that have worked at the firm for more than a decade
Debenhams is believed to still be consulting a number of employees.
A source told fashion website Drapers: ‘It’s savage. Some departments have been severely cut. It’s more than a major pruning – it’s a cull.
Debenhams has a lot of issues that have been built up over the years and it requires very drastic action.’
At House of Fraser, concerns over a deal to rescue the firm are growing as it struggles to get approval from unhappy landlords.
The retailer wants to push through a restructuring plan, known as a company voluntary arrangement, which will allow it to close stores and get rent cuts.
If it gets the deal approved, House of Fraser is expected to receive a cash injection from the Chinese owner of Hamleys, C Banner, which will also buy a 51pc controlling stake in the company.
Moss Bros On The Mend
Men’s suit maker Moss Bros said its fortunes have started to improve after a disastrous stock shortage rocked sales.
Sales of suits were down 5.2 per cent in the 15 weeks to May 12, slowing from a decline of 6.7 per cent earlier in the year, and the slide in hire sales stayed flat at 4.9 per cent.
Brian Brick, chief executive, said: ‘Following a disappointing start to the year, our trading has, as anticipated, begun to improve.’
It is thought a third of House of Fraser’s 59 stores could be axed.
But the 169-year-old retailer has experienced a backlash from landlords who argue that House of Fraser is claiming to be in financial distress so it can ignore its rental obligations.
The company has until June to get landlords on side for the plans to go ahead.
Meanwhile, fears over a looming crackdown on consumer credit have wiped off around £55m from the value of Shop Direct, owner of Littlewoods and Very.
A planned overhaul of high borrowing rates for shoppers by the Financial Conduct Authority has spooked Shop Direct’s investors who have been offloading stock.
Shares in the business, owned by the billionaire Barclays brothers, have plunged 15 per cent since the start of the year.
Investors are worried that the review, which is expected in a fortnight, could hurt Shop Direct, which charges sky-high interest rates on customer store credit.
Last month it revealed almost 2,000 jobs were at risk as it prepares to shut factories in Greater Manchester and move operations to the East Midlands.
A spokesman for Debenhams said: ‘Earlier this year we detailed our intentions to structure the organisation around three business units: Beauty & Beauty Services, Fashion & Home and Food & Events.
‘As set out in our interim results recently, we have already started work on reducing complexity across the business, including simplifying our processes in store and reducing the number of grades in our UK support centres, and this work will continue over the coming months.’
House of Fraser declined to comment, and Shop Direct was unavailable for comment.
It comes amid a difficult period for the High Street, which has seen thousands of jobs lost as online shopping and rising costs prompt retailers to shut stores.
Toys R Us and Maplin have both fallen into administration and Marks & Spencer, New Look and Carpetright have all been forced to close outlets.
And Mothercare is expected to announce a 95 per cent fall in profits to £1million in full-year results to be published today.