Debenhams profits frozen stiff by beast from the east, something boss Sergio Bucher must explain to Mike Ashley
The weather in March was indeed awful but Debenhams’ downbeat prognosis contrasts with that of both Primark and JD Sports
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Your support makes all the difference.Poor old Debs. The beleaguered department store chain says the “beast from the east” froze its results so the already bombed-out shares have had some fresh sale reductions applied.
They’re now languishing on one of those rails where the retailer puts the stuff no one wants to buy, even when they’re all but giving it away.
The trouble with its excuse – which you’re probably going to hear from other retailers with troubles too – is that while “the beast” was extreme by UK standards, Primark and JD Sports both managed to keep their investors warm.
Who can blame finance director Matt Smith for walking out the door in favour of taking up a similar role at Selfridges, where the in-store heating’s probably better and the phrase “you’re kidding, right” doesn’t automatically follow requests for a “bonus”.
With the shares in freewill and the financial media highlighting an 85 per cent fall in pre tax profits, chief executive Sergio Bucher decided to indulge in a little PR fluff.
Well I suppose he had to say something.
As such, there were no numbers at the top of the results (you can hardly blame him). Instead we got a bright and shiny “strategic update”.
Apparently the “Debenhams Resigned” strategy is being accelerated. You do rather want to ask why it isn’t already going at top speed if it’s the panacea for this business, but we’ll park that for now.
Super-new managers have been hired, new format store trials are going jolly well, and just look at at digital!
Meanwhile there are “five priority actions to mitigate fast-changing market conditions”.
I’ll crave your indulgence with just one because it says a lot about where this company is at: “Sustaining leadership in beauty through innovative customer engagement both in-store and online.”
No I don't know what it means either.
If Debenhams is still on the recruitment trail it might like to try and find someone who can come up with something a little better than that to convince people that the boss has the prescription to right a ship that looks like it’s sinking.
But perhaps we should have some sympathy for Mr Bucher, who left Amazon for this. He’s going to have to fix up a post results call with Sports Direct’s Mike Ashley to explain himself.
Mr Ashley recently upped his company’s stake in Debenhams to nearly 30 per cent. He’s just about at the limit before he’d have to bid for the whole thing. But he says he wants to fix up a “partnership” with the struggling chain.
Thing is, this (gulp) is a company that might actually do better with him in charge.
The bad news for Debs shareholders is that if that’s his ultimate plan he’s not likely to do it until he can pick it up for the price of one of his Lonsdale tracksuits.
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