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Debenhams has announced that its pre-tax profits fell by 84% to £13.5m after the ‘Beast from the East’ temporarily closed 100 stores.
The department chain also saw its like-for-like sales fall by 2.2% for the 26 weeks to 3 March, attributed to a “challenging UK market background”. Revenue also decreased by 1.6% to £1.65bn.
The pre tax profits figure of £13.5m is even lower than what analyst forecasts from earlier this week had predicted of around £42m-£44m.
Debenhams said profits for the full year would now be at the lower end of brokers’ forecasts of £50m to £61m, compared with £95.2m for the previous year.
As a result Debenhams has cut its interim dividend by 51% to 0.5 pence per share.
Sergio Bucher, CEO, said: “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. 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.
He added: “We are holding share in a difficult fashion market, and in other categories such as furniture, exciting new partnerships have the potential to transform our offer. We approach the remainder of the year mindful of the very challenging market conditions, but with confidence that we have a strong team and the right plan to navigate them and return Debenhams to profitable growth.”
The retailer also announced that is chief financial officer Matt Smith had resigned to join rival Selfridges.
