Debenhams has asked landlords for an immediate five-month rent holiday as the retail industry faces “unprecedented pressures” because of the coronavirus pandemic.
The UK department store chain is already in the midst of a major financial restructuring process, and has closed 22 stores. Another 28 of its remaining 141 stores are expected to close next year.
A spokesman for Debenhams said on Monday: “All retailers are facing unprecedented pressures from the current situation and we are managing our operations to minimise risks to colleagues and customers whilst – as far as possible – trading as normal.”
There is growing evidence of a sharp drop in the number of visitors to UK high streets and shopping centres in recent days, according to data from Springboard – except at large supermarkets, where many people are panic-buying.
Shops across the UK remain open, but the retail research company gave the first indication of the significant impact the outbreak is likely to have on sales at physical stores in the UK.
The trend was particularly notable on Sunday, when footfall on the high street was 31% lower than at the same point last year. Visitors to shopping centres were down 21%, according to the Springboard figures.
But in retail parks, footfall was down just 6.8% compared with a year earlier – partly because they are the location of large supermarkets at the centre of panic-buying since the coronavirus hit.
Meanwhile, the owner of the fashion chain Primark, Associated British Foods, said the outbreak would hit sales across Europe. It said 72 stores accounting for 20% of selling space were now closed in Italy, France, Spain and Austria.
Stores in those countries generate 30% of Primark’s sales, and the firm had expected sales of £190m over the next three to four weeks. In the UK – where its 189 stores remain open – Primark has suffered like-for-like sales declines over the last two weeks and “these have accelerated over the past few days as a result of reduced footfall”, the retailer said. Shares in ABF fell 5% to £17.39.
Kingfisher, the DIY retail group which owns B&Q, also warned of a sales hit, after it was forced to close all of its 221 Castorama and Brico Dépôt stores in France until 14 April, and to shut all 28 Brico Dépôt stores in Spain until 29 March.
It said it would try to mitigate the impact by offering home delivery and click and collect services. Kingfisher’s 1,100 shops across the UK, Ireland, Poland, Romania, Portugal and Russia remain open.
Flutter, the gambling group that owns Paddy Power and Betfair, warned of “unprecedented” times as it issued a profits warning after sports events around the world were cancelled or postponed.
If restrictions remain in place until the end of August, including a full suspension of Australian sports and the cancellation of the Euro 2020 football tournament, annual profits will come in £90m-£110m lower than expected, the company said.
Flutter will lose an additional £30m in profits every month if horse racing fixtures in the UK, Ireland and Australia are also cancelled and its UK and Irish betting shops have to close.
Peter Jackson, Flutter’s chief executive, said: “The challenge currently facing our business and the industry more widely is unprecedented in modern times.”
Bookmaker William Hill said it was suspending its dividend payout to shareholders, as sporting events were cancelled and US casinos closed in response to Covid-19.
Italy was the first European country to go into a nationwide lockdown last week, with only pharmacies, supermarkets and news kiosks allowed to stay open. Over the weekend, the French and Austrian governments decided to close all nonessential places used by the public, while Spain declared a two-week state of emergency.
Laura Ashley also warned that future trading could be hit due to the pandemic, as it told the City it needed further funding to shore up its finances.
