The crisis of the high street was to blame for Debenhams’ shrinking profit, the store’s chief executive has said.
Michael Sharp said the £85m profit announcement, 25% less than analysts had predicted, was down to a “sea of red” on the high street as rival retailers attempting to out-do each other on discounts.
Shares in the retailer dropped 12% to 73p after the announcement, wiping £124m off the value of the company. But rivals were hit as well, with J Sainsbury and Mark&Spencer both losing 2%.
Debenhams is now expected to discount even further to make up for the lacklustre Christmas sales.
Sharp said: “The market was highly promotional in the run-up to Christmas and we responded to these conditions to ensure our offer was competitive. However, this extremely difficult environment has inevitably had an impact on both our sales and profitability.”
