There’s still an outside chance that a buyer may rescue the Debenhams group, but the most likely outcome is that the current closing down sales will be just that.
This will leave a huge gap, not just in Ipswich town centre, but in town and city centres up and down the country.
It is a particularly bitter pill for Ipswich because our Debenhams was one of their better-performing stores. Even if Debenhams had managed to hang on it was planning to close stores, but Ipswich was not expected to be one of them.
There are big national issues at play here.
Covid-inspired losses are the immediate cause of recent failures, but the virus has just turbocharged existing trends, with out-of-town retail parks and internet shopping providing cutthroat competition to town centre retailers.
But the chains that have gone bust were struggling without Covid. Arcadia, BHS and Debenhams are all groups that were treated as cash cows by their owners. They were loaded with long term debt so that investors could extract huge short-term profits.
Servicing this debt left them short of money to invest in improvements and led to them falling behind the competition.
Where does this leave Britain’s town centres?
Almost certainly with less retail floorspace. Even if Ipswich’s Debenhams had survived it was looking to reduce to two floors. It’s highly unlikely that a single retailer will ever occupy the building again.
Large vacant retail space will have to be repurposed either as smaller units, alternative business uses or even housing. We are likely to see more independents and fewer national chains.
Fundamentally, the Government must decide if it really wants town centre retail to survive and, if so, needs to urgently reform business rates. Just as private equity investors have treated retailers as cash cows, so too has the Government with nationally imposed increases in business rates which now bear little relationship to the profitability of the companies they are levied on.
The current business taxation system disadvantages town centres compared to retail parks who are in turn disadvantaged compared to internet retailers.
This needs to be turned on its head or we will see even more stores go to the wall.