More bad news for Debenhams as sales continue to fall
By James Young | 5th March 2019
Sales continue to fall at Debenhams and the struggling high street giant has issued another profit warning.
A trading update released by the company said that the forecast made on January 10 that said they were "on track to deliver current year profits in line with market expectations" was no longer valid.
The company's chief executive also confirmed that plans are still in place to closing 50 stores.
No update was given in regards to which of the group's 200 plus stores are likely to be closed as it looks to restructure amid fears that the Kings Square outlet in Gloucester could go.
Today's update stated that gross transnational value was down by 5.4 per cent for the first half of the year to March 2, while like-for-like sales were down 5.3 per cent.
Since the January trading update the group "has moderated its decline" with the eight weeks to March 2 - including the Christmas period - down five per cent, with like-for-like decreasing 4.6 per cent.
Debenhams currently has an annualised cost saving programme of £80million and the latest update said that is on track.
The company announced in February that they had taken out a £40million bridge facility, buying it extra time to secure a longer-term agreement with lenders.
Discussions with stakeholders have "progressed" according to the statement, and options are being talked about to "restructure the balance sheet in order to address future funding requirements."
Chief executive Sergio Bucher said: "We are making good progress with our stakeholder discussions to put the business on a firm footing for the future.
"We still expect that this process will lead to around 50 stores closing in the medium term.
"Our priority is to secure the best outcome for the business and all our stakeholders, while minimising the number of store closures and job losses.
"To do this, as we have said before, we will need the support of both landlords and local authorities to address our rents, rates and lease commitments.
"I would like to thank our staff - and all our stakeholders - for their continued support through this period, as we work to deliver a sustainable future for the company."
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