Debenhams issues warning over profits amid “volatility in trading week to week”

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Debenhams

Debenhams has issued a warning over profits as it stated rough market conditions could see annual figures come in at the lower end of expectations.

Following a 0.9 per cent drop in third quarter like-for-likes, and 2.4 per cent on a constant currency basis, the department store has said full year profits are likely to take a hit.

Gross transaction values also dropped one per cent in the 15-week period to June 17, although online sales saw a 7.9 per cent boost.

Things looked at little brighter in terms of year-to-date figures, seeing a 1.7 per cent jump in gross transaction values and a 12.6 per cent jump in online sales.

The retailer is in the midst of a turnaround strategy driven by new chief executive Sergio Bucher, stating it has made “good progress” with its programme.

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This has seen 2000 staff be retrained for customer facing roles, replenishment times reduced from eight days to two and a transition to a single warehouse management system.

“We have already started to deliver changes that will improve service for our customers and simplify and focus our operations,” said Bucher, who joined the retailer from Amazon in October.

“As industry data has confirmed, May was a tough month for retailers and we continue to see volatility in trading week to week. As a result we are focused on delivering cost control and self”help through our ‘Fix the Basics‘ plan.

“We continue to build good foundations for longer term growth at Debenhams by becoming a destination, digital and different.”

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