Debenhams profits slump 52% after being bitten by ‘beast from the east’

Debenhams has blamed tough trading conditions and bad weather for a 52% slump in profits, after the “beast from the east” forced the retailer to temporarily shut almost 100 stores.

The department store group said like-for-like sales declined 2.2%, or 2.8% at constant currencies, in the 26 weeks to 3 March, against a “challenging UK market background”.

The temporary closure of almost 100 stores in the final week of the six-month period, when large parts of the UK were brought to a standstill by heavy snow and bitter cold weather, is estimated to have reduced like-for-like sales by 1% in the first half. Digital sales fared better, rising 9.7%.

Debenhams made an underlying profit before tax of £42.2m, down 51.9%, excluding one-off charges of £28.7m related to its turnaround strategy. Including those charges, profits were down nearly 85%.

The group’s chief financial officer, Matt Smith, is leaving after less than three years in the job for rival Selfridges where he will become finance director.

Debenhams unveiled a £10m cost-saving plan in January after a profit warning owing to poor Christmas trading. As part of this, it has removed a layer of management, cutting one in four of its store managers.

The company said it had strengthened its senior management team with key hires at all levels, including a new managing director of fashion and home. It is also trialling new store formats.