High street retailers have been struggling in recent months
Profits at Debenhams plunged by 85 per cent in the first half of the financial year, tumbling from £87.8m to £13.5m, causing shares in the company to drop by more than 10 per cent at the open.
The beleaguered department store blamed a combination of a “disappointing Christmas season” and extreme weather conditions for denting sales and margins. In the final trading week of the first half, which ended on 26 March, Debenhams was forced to temporarily close almost 100 stores, which is estimated to have reduced sales by 1 per cent. Sales were down 2.2 per cent overall in the six month period.
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Debenhams to cut 320 store management jobs in cost-cutting drive
The group slashed its dividend to 0.5p per share, a reduction of 51.2 per cent compared to 1.025p awarded this time last year.
The company provided an update on its accelerated Debenhams Redesigned strategy, which has seen the group focus on improving its website and establish new partnerships, including deals with Maisons du Monde and Swoon.
“The UK retail environment is undergoing profound change, and with the help of some important new senior hires, we are moving faster and working harder than ever to ensure Debenhams is well-placed to outperform in this new retail world,” said chief executive Sergio Bucher.
“We expect no help from the external environment, so we are focused on delivering our Debenhams Redesigned strategy, aiming to mitigate difficult trading conditions through self-help initiatives.
"It has not been an easy first half and the extreme weather in the final week of the half had a material impact on our results. But I am hugely encouraged by the progress we are making to transform Debenhams for our customers.”
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