CHILL WIND ON HIGH STREET
Store giant Debenhams the latest retailer to report downbeat results
DEPARTMENT STORE group Debenhams is the latest retailer to report a grim start to 2018, lowering its full-year outlook for the second time in four months and cutting its dividend after a 52 per cent slump in first half profit.
Debenhams, which delivered the sector’s first profit warning of the year in January, also said Matt Smith, its chief financial officer, is quitting to take up the same role at Selfridges.
Debenhams is not alone in finding the going tough. Official UK data showed the biggest quarterly fall in retail sales in a year.
Chief executive Sergio Bucher said: “We didn’t help ourselves at Christmas because our approach wasn’t good enough.”
Debenhams was forced to cut prices to drive sales of Christmas gifts.
Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have all plunged into administration this year, while fashion retailer New Look and floor coverings firm Carpetright are closing stores.
Rival department store group House of Fraser is seeking rent reductions while market leader John Lewis has cautioned on the outlook.
Mr Bucher is one year into a turnaround plan focused on closing some stores, downsizing or revamping others, cutting promotions and improving online service, while seeking cost savings.
Progress has been hampered by changing shopping habits, a squeeze on UK consumers’ budgets, a shift in spending away from fashion towards holidays and entertainment, as well as intense online competition and bad weather.
“The market has remained very volatile and competitive with consumer confidence and the clothing market continuing to fall,” said Mr Bucher.
The market has remained very volatile and competitive. Sergio Bucher, chief executive of Debenhams