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Gloucestershire Business News

Debenhams profits to fall by half

Debenhams is expected to post poor profits in its half-year results next week, as it struggles to keep its head above water in tough trading conditions.

Pre-tax profits at the department store are set to half from £87.8 million a year earlier to £44 million according to city analysts, as reported by Retail Gazette.

Like-for-like sales at the chain, which has a store in Gloucester, are also predicted to have dropped 2.5 per cent.

Poor Christmas trading and store closures due to March's extreme weather, which coincided with its spring sale, are thought to have hit margins hard.

A profit warning in January saw share prices plummet 20 per cent. Two underperforming stores were shut in October, with a further 10 earmarked for future cuts, although many of its stores are tied to long leases.

The Cheltenham store closed two years ago, when the former Beechwood shopping centre was closed to make way for high street rival, John Lewis.

Debenhams hasn't followed other retailers down the company voluntary agreement (CVA) route and was forced to cut costs by making 320 staff redundant earlier this year.

Read more: Shoppers tail off to eight-year-low as bad weather hits retailers 

Punchline says: "Debenhams has been a staple of the UK high street for many years, but sadly it cannot match the might of the online retailers and has been left in a difficult position with too many underperforming and unprofitable stores.

"Debenhams is such a huge part of Gloucester's heritage and retail offering, not to mention its significance to the success of any future Kings Square development, that we hope they turn their fortunes around quickly."

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