By Nawied Jabarkhyl, Jim Spencer
One of the UK's biggest retailers, Debenhams, is set to close its stores, putting 12,000 jobs at risk.
Debenhams is a retail giant in the UK that has been around for 242 years. It has survived two world wars and the recession, but the twin forces of the internet and the coronavirus pandemic were simply too much to bear.
Administrators say they have "regretfully" decided to start winding down operations, while continuing to seek offers "for all or parts of the business."
It has not been a good week for the British high street, as Arcadia Group, the owner of Topshop, Dorothy Perkins and Miss Selfridge are also now in administration.
Arcadia going into administration means another 13,000 jobs are on the line, as well as the future of brands including international fashion store Topshop.
Analysts say both Arcadia and Debenhams failed to grasp the rapid pace at which consumer behavior shifted toward online shopping.
"Debenhams has for a while been struggling with high rent bills, a lack of relevancy and the continued shift to online spending, all exasperated, of course, by the [COVID-19] pandemic," said Sahar Nazir, an analyst at Retail Gazette.
Arcadia was a major operator of concessions in Debenhams and its fall into administration could have made latter's purchase less appealing.
But, both businesses had underlying problems and similar difficulties, given their extensive property portfolios.
"We've seen more and more Brits continue to spend online and with those retailers that have fallen behind, there's one main similarity across all of them and that was the late shift to online," added Nazir.
As Amna Khan, a senior lecturer in consumer behavior and retailing at Manchester Metropolitan University, told CGTN Europe: "Arcadia has been quite slow with responding to consumer changes, particularly the fast-moving changes in fashion,"
But she also said Arcadia was a victim of a sea change in consumer activity and tastes.
"Arcadia, especially Topshop, hasn't been able to keep up with those changes … and all their competitors have done that a lot better than them.
"And the other issue is relevance. They're not as relevant as they once used to be to the consumer … they've not kept up with the change in fashion."
The coronavirus has also played its part.
England is set to emerge from its second national lockdown on December 2. The latest was almost a month long and most retail shops were closed for the traditionally busy pre-Christmas period.
The Centre for Retail Research predicts retailers will lose $23 billion in lost sales in 2020, mainly due to the pandemic. It also expects more than 235,000 jobs to be lost in the sector.
The loss of retail stores is likely to have a significant impact on local areas, particularly smaller ones, which rely on high streets for things like tax income.
