Debenhams shares dive on supplier fears

Worst-ever hit for struggling chain

MOre than £17m was wiped off the value of Debenhams in its worst-ever daily decline.

shares in the department store chain plunged more than a fifth as the crisis engulfing the High street grew deeper.

They have fallen by more than 80pc in the past year alone.

The trigger was disappointing sales figures from Britain’s beleaguered department stores. Dismal numbers from rival John lewis, where weekly sales were down more than 8pc, are understood to have shaken Debenhams’ shareholders who fear a difficult Christmas.

Two unnamed suppliers have also cut ties with Debenhams due to concerns over its ability to pay its bills.

a number of credit insurers have reduced cover for suppliers to Debenhams. When insurers pull their cover, this is normally interpreted as concern a company may not be able to pay its debts to suppliers.

The retailer downplayed the concerns. ‘Many suppliers don’t use credit insurance. Those that have used it historically are well aware of the current situation and work with retailers to manage things accordingly. Debenhams is well stocked for Christmas,’ it said.

City experts begged to differ and shares fell by 1.44p, or 21.4pc, to 5.27p.

‘Investors are clearly fearing the worst for Debenhams,’ said russ Mould, investment director at aJ Bell.

It comes as House of fraser’s owner sports Direct, run by tycoon Mike ashley, revealed it is shutting four more stores in major shopping centres, putting hundreds of jobs at risk.

Debenhams has already announced it is closing a third of its 166 stores.

ashley, has been hit by Debenhams’ woes. He owns a 29.7pc stake in Debenhams, which has plunged in value by £5.3m following the latest share fall.

sports Direct will shut House of fraser shops in lakeside in essex, Metrocentre in Gateshead, Nottingham and Norwich in the New Year, after the landlord, property group Intu, refused to lower rents.

ashley wants to save around 47 of House of fraser’s 59 stores, but shops in edinburgh, Hull and swindon have already shut since he bought it out of administration for £90m this year.