Debenhams eyes disposals as it cuts profit forecast again
British department store chain Debenhams cut its profit forecast for the third time in six months yesterday and said it might sell its Danish shops to bolster its finances and help cope with an industry crisis at home.
A string of British retailers have either gone out of business or announced plans to close shops this year, as they struggle with subdued consumer spending, rising business property taxes and online competition.
Department stores appear particularly vulnerable.
BHS went bust in 2016 and House of Fraser announced plans this month to shut around half of its shops.
Shares in Debenhams fell as much as 19.4pc, taking the year-on-year decline beyond 60pc after the firm slashed its full-year profit forecast, blaming heavy discounting by rivals and weakness in key markets, including beauty products.
It warned it did not expect brutal trading conditions to abate any time soon.
Debenhams had already committed to a £20m cost-savings programme, but said it needed to do more.
It plans to cut capital expenditure from about £140m in 2018 to £75m-£90m in 2019 and has launched a strategic review of non-core assets.
The six-store Magasin du Nord chain in Denmark has been identified for possible disposal, as has the firm's small printing business Magenta Print.
Debenhams bought Magasin du Nord for £12.3m in 2009.
Debenhams is now forecasting a pre-tax profit for the 2018 financial year of £35m to £40m. (Reuters)