Debenhams today posted a record annual loss in its history and is set to close 50 stores as part of its turnaround plan.
In the year to September the department store group lost £491.5m, against profits of £59m the year before.
Debenhams previously said it planned to close 10 stores.
Boss Sergio Bucher said the company was “taking tough decisions” on stores where financial performance was likely to deteriorate over time.
Richard Lim, Chief Executive, Retail Economics said: “Plans to close up to 50 stores reflects the mighty challenge faced by the retailer. They operate in a part of the market under the most intense amount of pressure. Put simply, department stores are incredibly expensive to run. The combination of too much space, inflexible leases and spiralling operating costs are set against a backdrop an accelerating behavioural shift towards online and experiences. This is eroding their profitability and changes in the business need to occur at a pace if they are to survive.
“They will need to push forward right-sizing initiatives and form strategic partnerships with other third parties to sweat assets more effectively, as they attempt to pivot towards a sustainable business model.”
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