4,000 jobs at risk as Debenhams announces 50 store closures
Debenhams has unveiled plans to axe up to 50 high street shops, putting around 4,000 jobs at risk, as profits plunged at the struggling department store chain.
The group said the closures will take place over a three to five year period and the announcement comes alongside a dire set of financial figures.
Debenhams swung to a Â£491.5 million loss in the year to September 1 after being stung by exceptional write-downs of Â£512.4 million, primarily relating to store and lease provisions, IT costs and impairment charges.
The loss compares to a Â£59 million profit in 2017.
Boss Sergio Bucher said: "It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging.
"We are taking tough decisions on stores where financial performance is likely to deteriorate over time."
The store closures will bring the Debenhams estate down to about 100 and come on top of 10 earmarked earlier this year.
As part of the shake-up, Mr Bucher will look to take Â£130 million of costs out of the business, including suspending the dividend.
Sales for the year also slipped 1.8% to Â£2.9 billion while like-for-like revenue fell 2.3%.
Mr Bucher insisted: "Debenhams remains a strong and trusted brand with 19 million customers shopping with us over the past year.
"With a strengthened balance sheet, we will focus investment behind our strategic priorities and ensure that Debenhams has a sustainable and profitable future."
Woes at Debenhams comes as a raft of retailers including New Look, Carpetright and Mothercare also embark on store closures programmes.
To compound matters, Debenhams is also the subject of takeover talk, with speculation building that Mike Ashley is set to merge it with his newly-acquired House of Fraser.
Mr Ashley owns just under 30% of Debenhams, close to the threshold at which he must launch an official takeover bid.
A Debenhams spokesperson said: “We have identified up to 50 stores, accounting for under 15% of total sales, which are currently profitable, but where we do not see a long term future and which we intend to exit over the next three to five years. This is an ongoing five year programme and we are not disclosing a list of these stores.”