When the private equity whizz-kids at CVC, TPG and Merrill Lynch floated Debenhams 11 years ago, they left it an unwanted present.
Before flipping it back onto the market, they cashed in the department store chain’s prized freeholds, signing it up to leases spanning decades. Today that legacy hangs heavily around the chain’s neck: its 175 stores in Britain and Ireland have an average lease length of 20 years.
That’s a lifetime in retail. The high street is already a shadow of its pre-recession self, under siege from online retailers and evolving shopping habits. A new chill wind blows through it as consumers brace for a Brexit slump. Like-for-like sales were down 2.4% in Debenhams’ latest quarter.
Its long leases give the chain few options