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Debenhams said trading failed to meet its expectations in spring and early summer despite weak comparatives. However, its CEO says the business is well-equipped to deal with market turbulence.

 

The department store chain — which has just introduced its first furniture concessions into stores having struck deals with Swoon and Maisons du Monde — said group sales dipped 1.7 percent on a like-for-like basis in the 15 weeks to June 16*.


"Against a background of increased competitor discounting and weakness in key markets, trading in May and early June has been below plan despite weak comparatives," the retailer said in a trading update to shareholders.


"We have reassessed our expectations for the balance of the year and now expect pre-tax profit for FY 2018 to be in the range of £35m–£40 million, with EBITDA in the range £160m–£165 million."


Debenhams said this compared with current market consensus of £50.3 million for profit before tax.


CEO Sergio Bucher said Debenhams is "well-equipped to navigate the market turbulence" with the business having put in place a leaner operational structure.


"It is well-documented that these are exceptionally difficult times in UK retail, and our trading performance in this quarter reflects that. We don't see these conditions changing in the near future and, because it is our priority to maintain a robust balance sheet, we are making very careful choices about how we deploy capital.


"We see clear evidence of progress as our digital growth outperforms the market and customers respond positively to our product improvements and format trials."


* -2.2 percent at constant currency