Debenhams drops 15pc on poor sales
Shares in Debenhams have plunged over 15pc as the retailer said sales slumped in January as snow kept shoppers at bay.
The department store operator – the second biggest in the UK after Marks & Spencer – said that between January 14 and 27, sales fell 10pc on a like-for-like basis. It said its margin for the half-year period would be lower than anticipated.
It said it had "strong sales momentum" initially, with like-for-like sales up 2.9pc in the first 18 weeks of the first half of its financial year.
Even with the snow impact, like-for-like sales were 3pc higher in the 26 weeks to March 2.
It expects first-half profit to be in the region of £120m (€139m). Cantor Fitzgerald had been forecasting a figure of £131m.
"While the impact of the snow on the outcome for the first half is disappointing, it is now behind us and sales volumes have recovered," said chief executive Michael Sharp.
Debenhams said that in an effort to boost sales following the freeze, it introduced additional promotional events in February.
"Although these events did drive some incremental sales, they did not fully recover those lost in January," it added.
"Further, the sales generated were mainly in the lower margin clearance lines."