Snow joke for Debenhams as profits slump

Debenhams has reported underlying pre-tax profit of £42 million for the 26 weeks to 3rd March, down from £87.8 million the year before.

This was in line with analysts’ forecasts, who were downbeat after the retailer’s disappointing Christmas and closure of stores in March due to extreme weather conditions.

Sergio Bucher, the former Amazon Executive who joined Debenhams as CEO in 2016, said that the UK retail environment was undergoing profound change. “With the help of some important new senior hires, we are moving faster and working harder than ever to ensure Debenhams is well-placed to outperform in this new retail world. We expect no help from the external environment, so we are focused on delivering our Debenhams Redesigned strategy, aiming to mitigate difficult trading conditions through self-help initiatives.”

Digital was a bright spot, with sales growing 9.7% in the half. The mobile site is now its largest and fastest-growing store, attracting more than 150 million visits and with annual revenues approaching £250 million. “I am hugely encouraged by the progress we are making to transform Debenhams for our customers. Our digital growth continues to outpace the market," said Bucher. 

He added: “We are holding share in a difficult fashion market, and in other categories such as furniture, exciting new partnerships have the potential to transform our offer. We approach the remainder of the year mindful of the very challenging market conditions, but with confidence that we have a strong team and the right plan to navigate them and return Debenhams to profitable growth."