British department store, Debenhams, could be closing up to a third of its stores in a bid to save £100m.
Jewellery brands stocked by the firm will be watching developments with interest as they face seeing the number of points of sale for their products drastically reduced.
Debenhams stocks more than 4,000 items of jewellery from brands such as Calvin Klein, Guess, Simply Silver and Phase Eight, according to its website.
On top of the 10 closures already announced last year, Debenhams’ bosses are considering closing up to a further 60 of its 166 stores, reports claim.
New Chief finance officer, Rachel Osborne, who joined the company from Domino’s Pizza last month, is working on reducing debt and tidying up her employer’s balance sheet.
The company will announce its annual results on Thursday and has already issued four profit warnings and lost two-thirds of its share price since the start of the year.
In an attempt to generate around £100m in savings, Debenhams hopes that scrapping the dividend will save the retailer about £30m.
The company plans to save a further £70m by cutting capital expenditure.
However, the extent of Debenhams’ store closures will depend on negotiations with landlords. Reports suggest that the chain could shrink to around 100 outlets.
In a letter written last week to property industry magazine Estates Gazette, Debenhams chief executive Sergio Bucher said: “After our people, property is our biggest cost and, right now, it is our biggest challenge.
“While almost all of our 166 UK stores are profitable today, extrapolate current market trends three to five years forward and that picture is going to change.”
Richard Stables, CEO of Kelkoo, an advertising and shopping ecommerce specialist, said that the Debenhams closures indicate the increasing struggle for high street retailers fighting to survive in a competitive landscape.
He argues that consumers increasingly value customer experience and better value, therefore maintaining a portfolio of dozens of under-performing or loss-making stores is simply no longer a viable option.
Stables said: “However, shareholders will be buoyed by the news of strong online growth suggesting that the retailer faces a brighter future if this continues.
“Retailers have to invest in a coherent online offering and harness the opportunity of omnichannel marketing in order to thrive.”