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Can gin bars and makeovers save Debenhams?

Debenhams is gambling on gin-and-tonic bars, make-up tutorials and X Factor-style auditions to recruit staff in an attempt to overcome the crisis gripping the High Street.

Chief executive Sergio Bucher last night pledged to make shopping fun again as he unveiled what he described as the ‘department store of the future’.

The new flagship store in Watford will stock 25 per cent fewer products as Debenhams makes space for personal styling, beauty makeovers and massages as well as restaurants and bars selling prosecco and gin and tonic.

Makeover: Debenhams chief exec Sergio Bucher last night pledged to make shopping fun again as he unveiled what he described as the ‘department store of the future’

Bucher, a former Amazon executive, insisted that the department store model was not dead, saying Debenhams would focus on better products and improved customer service. 

The group has seen its share price plunge to below 10p – valuing it at £120million – after issuing three profit warnings in six months.

The slump has sparked speculation of a takeover by Sports Direct which owns a 29.7 per cent stake.

Debenhams was forced to rush out a trading update earlier this month in a bid to calm investors concerned about the retailer’s finances.

The department store chain has already earmarked ten of its 165 stores for closure over the next five years and is looking at reducing the size of 30 others.

Meanwhile the leases on 25 sites are due to expire over the period so they can be easily shut down. 

It is also considering selling off its Danish department store Magasin du Nord which is thought to be worth around £200million.

Bucher said: ‘I know that we have a lot of space but if you’re able to use that space to create exciting things, to present your product better and to create destinations, I think that we can make shopping fun again.’

The chain has introduced X Factor-style auditions for store employees, to attract the best staff which are being recruited from the hotel, food-and-drink sectors, in addition to retail. 

So far this year Debenhams has axed more than 400 management roles as it focuses on putting more staff on shop floors.

Debenhams’s revamped store model is in response to the malaise gripping the High Street which has seen traditional department stores struggle to keep up with online rivals such as Amazon.

Earlier this year House of Fraser collapsed into administration only to be rescued hours later by Sports Direct in a £90million deal.

Even John Lewis has fallen victim to the slowdown with profits being all but wiped out in the first half of its financial year.

However, Debenhams said it will not revamp all its stores, saving refurbishment only for sites where it is affordable. 

In an article for Retail Week magazine, Bucher blamed business rates for putting pressure on the store’s profitability.

‘Debenhams paid £80million in business rates last year, five times more than our biggest online competitor. If we were taxed on the same basis as they are, our pre-tax profits would have trebled,’ he said.

‘But my confidence that we can deliver the turnaround and carve out a bright future is even greater than it was two years ago,’ he added.