Moribund Debenhams mired in ‘limbo’ as profits drift
British department store Debenhams has reported flat sales growth in the third quarter as the retailer struggles to gain market share from market leader John Lewis.
This represented a significant slowdown of the 1.3 per cent growth achieved in the second quarter, although this was flattered by a one per cent boost from a shift in a key sales period.
Despite this lacklustre performance Debenhams remains on course to meet expectations for £111m in pre-tax profits in its full year results, compared with £110m the year before.
Paul Thomas, of retail consultancy Retail Remedy, said: “Debenhams’ sales, much like its image, are stuck in limbo.
“Given the tired feel of many of its older stores, some will view its dead flat sales numbers as a modest success. But you can’t help feeling that in many instances the once venerable brand is living on borrowed time.
“Faced with a resurgent M&S and a strong House of Fraser that are consistently luring away its core customers, Debenhams has become heavily reliant on promotions.”
Debenhams intends to open five new stores in the UK this autumn in Bradford, Wandsworth, Rugby, Beverley and Newport.