Debenhams announces Christmas sales drop

Lloyd Doyle
January 14, 2019

We wish him all the best for the future.

Chairman Ian Cheshire said he would stand down with immediate effect.

Debenhams plc, in its trading update for the 6 weeks and the 18 weeks to January 5, 2019 said that against a challenging market backdrop, the group is now on track to deliver current year profits in line with market expectations, supported by further identified cost savings.

Debenhams said the results are down to tough trading conditions in the United Kingdom, but said it still expects to deliver current year profits in line with market expectations.

Over 56% of the votes cast at the AGM voted against the re-election of Cheshire and Bucher.

"In unprecedented market conditions the team has worked incredibly hard to build a format for the future and a comprehensive plan to reshape the business, which will put Debenhams on the road to recovery and future success". Sergio received 44.15% votes in favour of his re-election.

Bucher has agreed to stay on as CEO but will no longer serve on the board.

Terry Duddy, Debenhams' senior independent director, who was appointed interim chairman, said: "I recognise that individual shareholders have wished to register their dissatisfaction".

Ashley - who holds just under 30 per of Debenhams' shares - had made his growing frustration with the department store clear, which he said last month had refused to accept a £40m loan offer.

It said that the company is "open to constructive suggestions from shareholders that are in the interests of the business" and it is "committed to delivering the appropriate capital structure to ensure a sustainable and profitable future for all stakeholders".

Sales fell 5.7% in the 18 weeks to 5 January.

Earlier Thursday, Debenhams announced it is in talks with lenders over its financing amid weak store footfall over the Christmas period.

Debenhams saw sales drop over Christmas, but insists it is still on track to meet full-year profits targets. Group gross transaction value for 6 weeks declined 3.8 percent, with group like-for-like sales down 3.4 percent.

Struggling UK department store Debenhams has reported a 3.4 per cent drop in like-for-like sales over the crucial six-week Christmas trading period to 5 January 2019, after reporting a record full-year loss of almost 500 million pounds ($886.5 million) in FY18. The company added that digital sales have grown by 4.6 percent across the period.

The company warned that the United Kingdom trading environment is still "volatile", with savvy consumers actively seeking out discounts.

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