But the department store has kept City writing pads full this week with figures that suggest it is going anywhere but south.
The retailer’s pre-close trading update on Tuesday revealed that interim pre-tax profits will be ahead of last year.
The results are testament to the Debenhams management – who have been heavily criticised since the retailer’s float almost three years ago – and their strategy to drive margins through own-brand sales as well as their calmness under pressure, despite the City scrutiny.
Since the float, shares have plummeted and the City has pored scorn on the debt-laden retailer’s performance, but this week’s news should mark a turning point in sentiment.
But however good the trading story is, the balance sheet is a problem for Templeman et al. The City still remains nervous about Debenhams’ ability to meet its banking covenants next year.
The pre-close will go some way towards convincing those that need convincing that Debenhams can trade its way through the downturn without the need to restructure its finances.
But, while speculation that the retailer was set to mount a rights issue abates, Debenhams needs to find another way to translate to the City that its debt really isn’t an insurmountable problem. Management have played down reports that shareholders are negotiating on their behalf to inject new equity in the business.
We know that Debenhams’ management is proactive. The notorious discount days once slammed by the City have proved an effective antidote to tough trading conditions and opinion on their merits has been improved if not reversed.
So the share price may not yet be out of southern climes, but trading – unlike at some of Debs’ peers – looks as if its going north.