Ratings blow for Debenhams after profit warnings

A STRING of profit warnings has triggered a cut to Debenhams’ credit rating as conditions on the high street continue to bite.

Rating agency Moody’s has downgraded the troubled department store chain from B1 to B2 after the retailer in June announced its third profit warning this year.

The move was prompted by the pressure on Debenhams’ sales and margins from weak consumer spending and fierce discounting from rivals.

It comes amid reports that Debenhams has put a £250m price tag on its Danish department store chain Magasin du Nord as it explores ways to firm up its financial position.

The retailer has attempted to protect margins by selling the majority of its stock at full price, but has come under pressure from rampant discounting across the sector. Sergio Bucher, its chief executive, has said that some rival retailers have been on promotion 50pc longer than Debenhams, holding sales for 10 of the 15 weeks to June 16.

Moody’s said the discounting across the industry could continue to erode Debenhams’ sales next year.