Debenhams reports weak festive sales
Debenhams saw its UK like-for-like sales fall by 2.6% over the Christmas trading period as it battled against a “volatile and highly competitive” market.
In the 17 weeks to 30 December, its group transaction value dropped by 0.8% while group like-for-likes declined by 1.8% in constant currency or by 1.3% on a reported basis.
As result, Debenhams has now said that it expects full year pre-tax profit to be between £55 million and £65 million compared to analysts’ expectations of £83 million.
The retailer said the early weeks of the period were disappointing as the market remained volatile and competitive but following the introduction of tactical promotions, the performance in the final six weeks improved with like-for-like sales up 1.2% in constant currency.
However, the first week of the post-Christmas sale was below expectations despite further markdown investment, particularly in the seasonal gift category.
Sergio Bucher, chief executive of Debenhams, said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance.
“Nevertheless, we are seeing positive early signs from the changes we have made as part of our Debenhams Redesigned strategy. The market dynamics we have seen have reinforced our view that we need to move even faster to implement the cultural and organisational changes needed to ensure Debenhams is in the best possible shape for today’s fast-changing retail environment.”
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