SMH: UK department store Debenhams to shut Australian store

The original article from SMH.com is here.

Written by Patrick Hatch

British department store Debenhams' brief foray into Australia is over, with the chain planning to close its only local store early next year.

The retailer opened its doors in the St Collins Lane shopping centre, which connects Melbourne's Collins and Little Collins street, with great fanfare in late 2017, offering exclusive designers and products direct from the UK.

That was to be the first of about 10 Debenhams stores planned for Australia through a franchise agreement with local retail group Greenlit Brands, which owns Harris Scarfe, Best & Less, Freedom, Fantastic Furniture and Snooze.

But Greenlit Brands' ambitions appear to have been put on ice, after Debenhams collapsed into administration in the UK in April and said it would close and sell 50 of its 241 stores to pay off lenders.

In an email to Australian shoppers on Tuesday afternoon, Debenhams said it will be "departing Melbourne in the New Year".

"Our appreciation of your loyalty and support is top of mind for us right now," the email said.

"Thanks for supporting us."

The store has been discounting heavily for several months, and the email to customers said there are "more reasons than ever to pop into St Collins Lane".

Steve Kulmar, from industry consultants Retail Oasis, said Debenhams was always going to have a "really tough, tough time" in Australia.

“It’s hard to know, when our two major department stores - Myer and David Jones - are struggling to get sales, why you would launch a mid-market department store in one difficult location and assume somehow you know better," Mr Kulmar said.

“It’s almost a bit arrogant.”

Greenlit Brands chief executive Michael Ford said the company had carefully considered the implications of the Debenhams UK administration and decided to terminate its franchise agreement.

“Our immediate focus is to support the Debenhams team members in Australia through this process and where possible, look at redeployment opportunities in the Greenlit Brands group," Mr Ford said.

"This process will be undertaken carefully and sensitively while maintaining business as usual and continuing to serve our loyal Debenhams customers in Australia.”

Greenlit was until recently known as Steinhoff Asia Pacific Group but changed its name after its global parent company, Steinhoff International, was hit by an accounting scandal.

The Australian arm entered explored a sale to private equity, or rivals Harvey Norman and Nick Scali, but eventually secured a $256 million financing package with a banking syndicate made up of ANZ, NAB and Deutsche Bank and remains owned by Steinhoff International .