Debenhams is rocked by fourth profits warning

Sales fall 6pc in six months Losses to hit £30m in 2019 Shares dive 89pc in a year

Debenhams’ future is ‘hanging in the balance’ after a fourth profit warning in just over a year.

The struggling department store could now plunge to a £30m full-year loss, according to analyst estimates, as sales continue to fall.

In a surprise trading update, Debenhams said sales in the UK tumbled 6pc in the 26 weeks to march 1, meaning it will now miss full-year profits targets.

It is the fourth profit warning since January 2018 as it fights for survival.

Debenhams had been expecting to post full-year profits of around £8m but said this was ‘no longer valid’. analysts now expect a loss, predicting a range from £22m to £30m.

shares fell 2.8pc, or 0.09p to 3.1p last night, valuing it at just £39.2m. experts warned management’s turnaround plan was now crucial for the future.

Laith Khalaf, senior analyst at hargreaves Lansdown, said: ‘Debenhams’ future is hanging in the balance, and with short sellers circling too, we can expect share price movements to be volatile. The department store needs to stage a Lazarus-like recovery.’

neil Wilson, analyst at trading platform markets, said: ‘even if Debenhams can restructure its balance sheet, can it manage with this kind of sales decline?’

The profit warning came just days after Debenhams secured a £40m lifeline from its lenders.

It is preparing to close around 50 of its 166 stores in the next five years, but it could launch a restructuring procedure, called a company voluntary arrangement, if it struggles to strike a deal with landlords. The £40m lifeline was seen as a snub to sports Direct billionaire mike ashley, who offered the same sum interestfree loan in December, but was rejected.

The pair have been at loggerheads since, with Debenhams accusing ashley, 54, of ‘pure mischiefmaking’ in a letter sent to mPs. sergio bucher ( pictured), chief executive of Debenhams, said it was on track to make £80m in savings this year. he added that talks with stakeholders including lenders and landlords to put Debenhams on a firm footing were ‘continuing constructively’. ‘Our priority is to secure the best outcome for the business and all our stakeholders, whilst minimising the number of store closures and job losses,’ he said. ‘To do this – as we have said before – we will need the support of both landlords and local authorities to address our rents, rates and lease commitments.’