Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Investment: Debenhams stays bullish

Edited Peter Thal Larsen
Wednesday 28 October 1998 00:02 GMT
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

THERE ARE only 58 shopping days left until Christmas and Debenhams' management will be holding their breath for every one. "Christmas is crucial" for this year's trading says chief executive Terry Green.

Unfortunately, the omens don't look good. Slowing sales growth took the gloss off what, otherwise, were impressive first results since Debenhams demerged from Burton in January. On a pro-forma basis, profits rose 16 per cent to pounds 138.6m on sales up 6.5 per cent at pounds 1.37bn.

Retailing, though, is all about current sales and on a like for like basis sales growth has slowed from 4.6 per cent in the second half of last year to "a little bit ahead" in the seven weeks of this year. Analysts interpret this as a 1 to 1.5 per cent rise. Even those estimates, however, could be too rosy. John Lewis's recent announcement of a sales decline of 5 per cent shows how difficult life is for retailers.

Debenhams remains sufficiently bullish to expand its store opening programme from 17 to 19 over the next five years. Management also gives a reassuring air of knowing where the company is heading - brands that you can only get in Debenhams, new designers and your own personal shopping assistant are all part of the strategy.

For all that, Debenhams remains predominately a clothes retailer, albeit one with low financial and operational gearing. Brokers' profits forecasts of about pounds 145m for the current year come with warnings about possible downgrades in future. In a rising market, the shares jumped 25p to 367p yesterday for a forward multiple of 14. Solid, but unless the consumer slowdown disappears, high enough.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in