Debenhams has warned that profits are likely to come in behind expectations as it discusses funding options to restructure its balance sheet.
The department store group said discussions with stakeholders are “continuing constructively” but “this process is likely to be disruptive to our business in the coming months”.
That, along with “macroeconomic uncertainties and increased financing costs as a result of additional working capital needs” will take a toll on earnings.
Debenhams said that in the 26 weeks to March 2, group gross transaction value was 5.4%, or 5.3% like-for-like. The UK decline was 6%. Digital sales rose 2%.
In the eight weeks to March 2, the fall in group gross transaction value “moderated” to 5%, or 4.6% like-for-like.
Debenhams chief executive Sergio Bucher said: “We are making good progress with our stakeholder discussions to put the business on a firm footing for the future. We still expect that this process will lead to around 50 stores closing in the medium term.
“Our priority is to secure the best outcome for the business and all our stakeholders, while minimising the number of store closures and job losses.
“To do this, as we have said before, we will need the support of both landlords and local authorities to address our rents, rates and lease commitments. I would like to thank our staff – and all our stakeholders – for their continued support through this period, as we work to deliver a sustainable future for the company.”