Debenhams issue further profit warnings

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Department store chain Debenhams has issued further profit warnings, saying its annual profits will be below its last forecast in June.

The retailer, which has stores in Lincoln, Scunthorpe, Nottingham, Sheffield and Doncaster, issued its third warning in June this year, with chief executive Sergio Bucher stating there has been no significant improvement since.

Debenhams’ chief executive said that the company’s annual profit will now be £33 million, in comparison to its previous estimate in June of £35-40 million.

This new estimate is reported to be in line with current market forecasts, and the company has appointed advisers KPMG to help improve its performance.

According to reports, the company and KPMG are looking at a number of potential options for the retailer.

This includes a company voluntary arrangement (CVA), but that is just one possible measure under consideration.

A CVA is a form of insolvency proceedings, which could be used to close stores and renegotiate rents, however there have been no reports to suggest the retailer will be closing any stores at this moment in time.

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