UK department store chain Debenhams has posted “disappointing” sales in its post-Christmas report blaming “tough competition and a volatile market.”
The nationwide high-street retailer saw like-for-like sales in the 17 weeks to 30 December in its core UK market fell 2.6% overall, while shares in Debenhams were down 21pc to 28p in early trading.
However, the retailer said trading improved over the six-week Christmas period thanks to discounting, with like-for-like sales up 1.2% during that time, but the first week of the post-Christmas sale was worse than expected.
Debenhams Chief Executive Sergio Bucher said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance.”
The company now predicts pre-tax profit of £55 million to £65 million for the year, down from £59 million last year. Meanwhile, it expects costs for its fiscal 2018 results to meet the lower end of its previous guidance range of 1% to 2% growth.
Debenhams added that “reorganisation and restructuring activity” and a review of central costs were expected to generate savings of £20m.
The retailer’s results are in stark contrast to that of UK clothing store Next, which posted a surprise raise in its annual profit forecast on Wednesday
Next said annual profits were expected to rise by £8 million to £725 million after cold weather boosted trade ahead of Christmas, sending full-price sales up 1.5% – exceeding the 0.3% fall which was predicted.