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* Debenhams to likely cut 1,400 jobs
* Co will close 5 stores in Hammerson
* Hammerson fell more than 12% on Wednesday
(Adds details on rent payments, background)
By Samantha Machado
May 6 (Reuters) - British department store group Debenhams
said it will shut down five of its stores in Hammerson
leading to potentially 1,400 job cuts, as it failed to agree
rent terms with the mall operator.
Retail property owners and tenants have been working
together to defer rent payments and find other solutions that
allow shops, businesses and landlords to ride out the
coronavirus shutdown.
"We can confirm that despite our best efforts, we have been
unable to agree terms with Hammerson on our five stores in its
shopping centres, and so they will not be reopening", Debenhams
said in a statement.
"We continue to engage in constructive talks with our
landlords and have agreed terms on the vast majority of our
stores, which we look forward to reopening when government
restrictions allow".
With Britain in lockdown during the pandemic, Debenhams'
142 UK stores are closed, while the majority of its 22,000
workers are being paid under the government's furlough scheme.
The company continues to trade online.
Debenhams' spokesman said the company would shut down stores
in Hammerson's centres, including Bullring and Oracle.
The likely 6% cut in its workforce comes as the retailer
went into administration last month for the second time in a
year, seeking to protect itself from legal action by creditors
during the pandemic that could have pushed it into liquidation.
The news is an additional blow to Hammerson, whose shares
hit an all-time low after it terminated a 400 million
pound($497.20 million) deal to sell its retail parks to private
equity firm Orion on Wednesday.
They were the top loser on the STOXX 600 index.
Shares of the company have dropped more than 80% since late
December.
Last month, an industry body said that British retailers
suffered their biggest fall in sales since the 2008 financial
crisis in the first half of April as the pandemic kept shoppers
at home and forced store closures.
Fashion retailers Oasis Warehouse Group and Laura Ashley
Holdings also went into administration in recent months.
Shares of Hammerson, which received only 37% of its UK rent
billed for Q2, fell more than 12% on Wednesday.
(Reporting by Samantha Machado in Bengaluru;
Editing by Vinay Dwivedi and Jonathan Oatis)
