Debenhams is set to wind down the business and close all 124 stores after JD Sports ended discussions over a possible rescue deal for the struggling department store chain.

Administrators to Debenhams, which has been seeking a buyer since the summer, said the sale process had “not resulted in a deliverable proposal”. This means all 12,000 employees are likely to lose their jobs.

They will continue to seek a buyer while stores will remain open to sell off remaining stock. If no buyer is found once that stock is sold, the stores will close.

Geoff Rowley of FRP Advisory, the joint administrator to Debenhams, said: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams. However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.

“The decision to move forward with a closure programme has been carefully assessed and, while we remain hopeful that alternative proposals for the business may yet be received, we deeply regret that circumstances force us to commence this course of action.”

Talks with JD Sports ended after Debenhams’ major supplier Arcadia collapsed into administration on Monday, and it is understood that the uncertain future of the group, which owns Topshop and Burton, played a big part in the decision.

JD confirmed the decision on Tuesday morning in a statement which said: “discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated.”.

Debenhams, which employs about 12,000 people and operates 124 shops, has been considering a potential sale since the summer after it went into administration in April for the second time in a year.

With the exit of JD Sports, the only remaining suitor likely to take on a significant number of stores is Mike Ashley’s Frasers Group.

Ashley has made no secret of his interest in the ailing department store despite seeing a £150m stake he built up in the then listed company wiped out last year in a debt restructuring deal with the department store’s lenders. However, Ashley’s offers for the business have so far not exceeded half of the £300m hoped for by its owners.

Devastating news for Bangor

Plaid Cymru Member of Parliament for Arfon Hywel Williams and MS Sian Gwenllian have described the news that Debenhams are set to close all their 124 UK stores as ‘devastating news for Bangor.’

Hywel Williams MP and Siân Gwenllian MS said: “This news underlines the dangers facing our high streets, as many businesses struggle to survive through the Covid-19 crisis and the public health measures which limit capacity and demand.

“The prospect of losing an anchor store like Debenhams is a major blow to any town, but the closure of the Bangor store would be felt doubly hard as it occupies a central position on the high street. Its closure would leave a huge hole to fill in the city centre.

“This announcement will be particularly devastating for the staff, who must be supported by Debenhams at a time when our local economy can ill-afford further economic uncertainty.  

“The impact of the Covid-19 pandemic, including the closure of retail stores for prolonged periods has undoubtedly contributed to this announcement. Now more than ever, our town centres need urgent and targeted government support to help them recover post-Covid.

“Plaid Cymru have proposed a series of measures to address the difficulties faced by our high streets and help rejuvenate town centres.

“These include providing out-of-town businesses with targeted support to relocate to central locations to help regenerate town centres and a radical overhaul of business rates, providing high street firms with a fair renting framework.  

“Without practical solutions and an acknowledgment from government of the severity of the situation, then the outlook for our high streets will remain very bleak.”