By Geoff Percival
Struggling UK department store operator Debenhams has said its Irish division is continuing to benefit from the restructuring programme it carried out here in 2016 and has helped drive growth in its international division in recent months.
The retailer, one of many struggling on the UK high street, yesterday lowered its full-year earnings outlook for the second time in four months and cut its dividend as it reported a 52% slump in first-half profit, to £42.2m (€48.5m), further hammering its already battered share price.
Revenue, for the six months to early March, fell 1.6% to £1.65bn (€1.89bn). The stock fell as much as 13%, taking its year-on-year plunge to 62%.
Debenhams also said Matt Smith, its chief financial officer, is quitting the retailer to take up the same role at rival Selfridges. The group is one year into a turnaround plan led by chief executive Sergio Bucher.
His programme involves closing some stores and revamping the rest, cutting promotions and improving online service, while seeking efficiencies by simplifying the business.
However, progress has been hampered by changing shopping habits, a squeeze on UK consumers’ budgets, a shift in spending away from fashion towards holidays and entertainment, and intense online competition.
In Ireland, Debenhams has 11 stores across Dublin, Cork, Galway, Limerick, Waterford, Newbridge, and Tralee.
While it said its Irish stores have suffered some of the same market pressures as the UK, it added they “continue to benefit from the restructuring achieved in 2016”. Debenhams Ireland exited examinership in that year, with the loss of nearly 100 jobs.
In its latest results, Debenhams also attributed a 3.5% increase in international sales to online growth, and its performances in Ireland —where the strong euro helped — and Denmark.
Most recent accounts for the Irish business, covering 2016, showed a narrowing of losses to €5.3m and an 8.5% rise in revenue to €181m.
Debenhams declined to comment on whether Ireland may be included in the ongoing shop closure review, which has so far earmarked 10 UK stores.
Additional reporting, Reuters