Thousands of jobs at risk as Debenhams announces plans to close stores
It's as bosses announce huge loses - those that are under performing are now at risk.
The retailer has made the following statement:
Retailer Debenhams plc today announces preliminary results for the 52 weeks to 1 September 2018, confirming the EBITDA, pre-exceptional profit before tax and net debt data released on 10 September 2018.
Good progress on five priority actions under Debenhams Redesigned strategy:
· Delivered above-market digital growth of 12% supported by improved mobile and customer experience
· Sustaining market leadership in Beauty with new strategy designed to drive more choice and digital innovation
· Revitalising fashion product under new leadership; held share in clothing, and gained in womenswear
· Improved in-store experience for customers, with 9 stores trading in new design format and new service model
· Accelerated cost reduction activity with £12m savings achieved, annualising to £20m
Decisive action under way in challenging market conditions to generate cash, reduce debt and reshape store estate:
· Additional cost reductions of c.£50m annualised, taking cumulative cash savings to c.£130m by FY2020
· Revised capex plans for FY2019 of c.£70m, focusing on priority elements of Debenhams Redesigned strategy
· Comprehensive review of store portfolio to address structural challenge and drive profitable growth:
o focusing future investment to deliver Debenhams Redesigned principles on up to 100 stores;
o increasing closure plans from 10, to up to 50 under-performing stores over 3-5 years; and
o developing new lower-cost approach for c.20 stores
· Cash exceptional charges of £12.3m in year, non-cash exceptional write-downs of £512.4m primarily relating to store and lease provisions, systems and impairment to historic goodwill
· In line with stated plan to prioritise debt reduction and cash generation, no final dividend will be paid
Sergio Bucher, CEO, commented:
"It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging. Working with our new CFO Rachel Osborne, and the board, I am determined to maintain rigorous cost and capital discipline and to prioritise investment to achieve profitable growth. At the same time, we are taking tough decisions on stores where financial performance is likely to deteriorate over time.
"Debenhams remains a strong and trusted brand with 19m customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market. With a strengthened balance sheet, we will focus investment behind our strategic priorities and ensure that Debenhams has a sustainable and profitable future."Published: by Radio NewsHub