The chief executive of Debenhams had to defend his turnaround strategy for the struggling department store chain yesterday after shocking the City with a big profits warning.
In an unscheduled trading update, Sergio Bucher said that he was still confident that he could “redefine” Debenhams, even as he warned shareholders that the group’s pre-tax profits would now be between £55m and £65m.
This was well below the market consensus of about £83m and comes after Debenhams had to cut prices when facing intense competition in its key “gifting” category both before and after the Christmas period.
The company’s share price tumbled more than 15% following the announcement, with the Times reporting that Mike Ashley, the largest shareholder in Debenhams, suffered a “paper loss” of more than £13m on his stake.
According to the Telegraph, Debenhams has stumbled off the wagon and is suffering being hooked on the discounting drug once again. Former bosses Rob Templeman attempted rehab, Michael Sharp tried to argue that the chain was in recovery and now the latest chief, Sergio Bucher, has felt the vicious side-effects of an addiction to price-cuts.
The Guardian adds that job cuts and store closures are likely after disappointing sales.
According to the FT, Debenhams’ costly problems are bricks not clicks as Bucher faces challenges in creating new format stores and ‘right sized’ old stores.
To access the full FT article click on this search and select the top link
Click here for the full Times article (£)
Click here for the full Times article on Ashley (£)
Click here for the full Telegraph article
Click here for the full Guardian article
