Debenhams makes £491.5m loss and to close 50 stores with 4000 jobs at risk

Debenhams which has 166 branches has posted a £491.5m record annual loss against a profits of £59m previous year and will close up to 50 stores in the next 3-5 years putting 4, 000 jobs at risk.

Boss Sergio Bucher said the company was “taking tough decisions, as 40 of these stores earmarked for closure and where financial performance was likely to deteriorate over time, although  were currently contributing positively to the business. However rolling forward current trends, we do not believe they will remain profitable in future years and therefore we intend to exit these stores over the next 3-5 years. As we said in September, we generated £160m of operating cash, we generated £33m in profit before tax”.

The chain plunged into loss due to exceptional write-downs of £312.4m, mainly to do with store and lease provisions.

Debenhams saw sales in UK stores fall by 6.3 per cent over the year, amid what it described as a volatile market background, while its online business grew by 10 per cent.

The Debenhams share price has lost four fifths of its value in the last year.