Investors inured as Debenhams takes another nosedive

Comment Martin Flanagan

It speaks volumes about the low expectations of the City for perennial jam-tomorrow business Debenhams that a collapse in annual profits and a flat-lining of like-for-like sales at the department store group barely moved the share price.

The Groundhog Day stuttering performance of the company in recent years has made the hurdle to surprise investors, even unpleasantly, pretty high. New chief executive Sergio Bucher maybe inadvertently put his finger on it when saying yesterday: “We’ve delivered exactly what the City was expecting of us in a volatile environment.”

Yes, profits down 44 per cent, continuing exceptional costs for yet another revamp programme, frozen dividend. What else you got? That might sum up the City’s jaded reaction to Debenhams.

Bucher is setting store by new beauty bars and in-store gyms to attract customers, the whole nine yards of the “retail as experience” concept. It is not alone in this. John Lewis, for instance, is going a bit down this track. The difference is that John Lewis is doing it with far less damage currently to earnings. For Debs, it has been a long journey to recovery. And the horizon is still cloud-flecked. than a year ago but about £300 million shy of City expectations.

More positively, as with Lloyds the day before, Barclays at least did not have to make any further provisions for payment protection insurance (PPI) mis-selling.

The bear case for the high street banking arm, however, is that it is largely treading water rather than making waves. Meanwhile, Barclays has the Serious Fraud Office criminal case into its Qatar fundraising during the financial crash hanging over it, as well as the financial regulators’ investigation into Staley’s attempt to identify a whistle-blower.

Barclays is not doing badly, but is clearly not out of the woods yet.