Profits take tumble at retailer Debenhams

FASHION: Department store spent £36m on restructuring plan

Department store chain Debenhams reported a collapse in annual profits yesterday as boss Sergio Bucher bemoaned an “uncertain” trading environment.

The retailer, which has stores in Dundee, Perth, Dunfermline and Kirkcaldy, said pre-tax profits fell 44% to £59 million in the year to September 2.

The company also booked a £36.2m exceptional charge linked to a restructure being undertaken by the chief executive.

Sales rose 2% to £2.95 billion and Mr Bucher, who took over a year ago, said Debenhams is “making progress”.

“We are making good progress with implementing our new strategy, Debenhams Redesigned, and are encouraged by the results from our initial trials, as well as the number of exciting new partners who want to work with us.

“The environment remains uncertain and we face tough comparatives over the key Christmas weeks.”

Sales of beauty, accessories and food and drink helped to mitigate the impact of a weaker clothing market, Debenhams said, with food sales rising 8%.

However, like other retailers, Debenhams is grappling with soaring inflation linked to the Brexit-hit pound.

To mitigate the impact, Debenhams has also been shaking up its supply chain.

“In relation to those costs we are unable to offset, we intend to maintain our competitive position, reacting to market conditions as appropriate,” the group said.

Picture: Gareth Jennings. The Debenhams store at the Overgate Centre in Dundee.