logo

Debenhams Loses Half a Billion

By rotide
Created 26/10/2018 - 09:21

 

Debenhams, posts the largest loss in its 240 year history, after taking a huge write-down of £512 million pounds into the books on property and good will values held within the group. A bitter but necessary bullet to take and without it they would have shown a profit in the region of £33 million.

They have announced a plan to turn their fortunes around, that included a closure of nearly a third of their 165 stores, potentially putting the jobs of some 4,000 employees at risk. This is a massive increase from the expected closure of 10 stores only and is expected to take 3-5 years but has already started. Main stores are expected to survive, if they remain profitable.

It's the old bricks and mortar story versus online sales. While Debenhams do have a thriving online offer that showed a healthy 10 % increase in sales during the period to September, the costs involved in maintaining a huge branch network with staffing of course, have weighed heavy on Debenhams. Having issued three profit warnings this year, it is hoped that this strategy will secure their future with analysts wondering whether the axe should have fallen on the branches they are pruning, somewhat earlier.


 


Source URL:
https://www.newbusiness.co.uk/content/debenhams-loses-half-a-billion