5th Mar 2019 09:16
LONDON (Alliance News) - Debenhams PLC on Tuesday said said it no longer expects to deliver annual profit in line with market views following a decline in sales in the first half of its current financial year.
The stock was trading 6.6% lower on Tuesday at 2.99 pence a share. The price is down 90% in the past 12 months.
The department store operator reported a fall in gross transaction value of 5.4% for the 26 weeks to this past Saturday, with like-for-like sales down by 5.3%. UK sales slipped by 6.0% with International sales down 2.3%. More positively, online sales grew by 2.0% over the period.
Debenhams said that trading headwinds have moderated in recent weeks, but the company expects macroeconomic uncertainties and increased financing costs to disrupt its business in the coming months.
In mid-February, Debenhams agreed a new GBP40 million credit facility for 12 months with its existing lenders and inked a sourcing partnership with US and EU retail chains manager Li & Fung.
At the time, the retailer said the new loan facility will act as a bridge to facilitate a broader refinancing and recapitalisation, and the company had said it was continuing to engage constructively to conclude a comprehensive refinancing.
The company said on Tuesday that discussions with stakeholders have now progressed to include options to restructure its balance sheet in order to address its future funding requirements, and are continuing constructively.
"We are making good progress with our stakeholder discussions to put the business on a firm footing for the future. We still expect that this process will lead to around 50 stores closing in the medium term," said Chief Executive Sergio Bucher.
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