Debenhams pre-tax profits slump 24.5%

British retail giant Debenhams has said that continued tough trading conditions in Ireland hampered growth in its international division in the first half of its financial year.

The group yesterday reported a 24.5% annualised drop in pre-tax profit for the six months to the beginning of March, to £85.2m (€103.2m).

In its non-UK, international business — largely comprising its operations here and in Denmark — gross sales growth of 6.8% was achieved. While its Danish stores performed well, “difficult trading conditions in Ireland resulted in a significant decline in gross margin, which impacted profitability”.

Updated annual accounts for Debenhams’ Irish business blamed the highly promotional market in the run-up to Christmas for going into the red last year, with total pre-tax losses of €6.97m.

Debenhams Retail (Ireland) Ltd’s revenues dipped marginally from €162.5m to €162.1m in the year to the end of last August.

A spokesperson said: “The results for Debenhams Ireland reflect the difficult conditions in the Irish retail market during 2013, and in particular the highly promotional market in the run-up to Christmas. This diluted the success of our own planned promotions, which are a traditional strength for Debenhams.”

The pre-tax loss follows a pre-tax profit of €7.8m in 2012 — a negative swing of €14.77m. The firm last year paid a dividend of €54.8m to its parent.