UK’s Debenhams warns on profit again, blames weak market

British retailer Debenhams is faced with having to make further cost savings (Hannah McKay/Reuters)
Updated 19 June 2018
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UK’s Debenhams warns on profit again, blames weak market

  • Debenhams said group like-for-like sales fell 1.7 percent in the 15 weeks to June 16
  • The firm said it is now forecasting a pretax profit for the 2018 financial year of 35-40 million pounds ($46-$53 million)

LONDON: British department store Debenhams warned on profit for the third time in six months on Tuesday, blaming poor trading on increased competitor discounting and weakness in key markets.
The firm said it is now forecasting a pretax profit for the 2018 financial year of 35-40 million pounds ($46-$53 million) compared to current market expectations of 50.3 million pounds.
It is planning for “a material reduction” in capital expenditure in the 2019 financial year and also intends to conduct a strategic review of non-core assets, having already committed to 20 million pounds of cost savings.
Debenhams said group like-for-like sales fell 1.7 percent in the 15 weeks to June 16.
“It is well-documented that these are exceptionally difficult times in UK retail, and our trading performance in this quarter reflects that,” said Chief Executive Sergio Bucher.
“We don’t see these conditions changing in the near future and, because it is our priority to maintain a robust balance sheet, we are making very careful choices about how we deploy capital.”
Bucher, a former Amazon and Inditex executive who joined Debenhams in 2016, is one year into a turnaround plan focused on closing some stores, downsizing others, cutting promotions and improving online service, while seeking cost savings.
But his progress has been hampered by changing shopping habits, a squeeze on UK consumers’ budgets, a shift in spending away from fashion toward holidays and entertainment, as well as intense online competition.


Pakistan in final round of talks with IMF over bailout deal

Updated 25 min 52 sec ago
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Pakistan in final round of talks with IMF over bailout deal

  • Finance Minister Asad Umar acknowledged the two sides have differences and that the talks may not end on Tuesday
  • Pakistan has been approaching the IMF since 1980s and received a $6.7 billion loan in 2013

ISLAMABAD: Pakistan and the International Monetary Fund are into their final round of talks over an $8 billion bailout package Islamabad seeks from the international lending agency to overcome the country’s economic woes.
Finance Minister Asad Umar acknowledged the two sides have differences and that the talks may not end on Tuesday.
Authorities say they are still at odds over electricity rate hikes, as well as interest rate hikes and tax collection targets, and that the IMF is looking for more than Pakistan’s new government feels it can manage.
Pakistan has been approaching the IMF since 1980s and received a $6.7 billion loan in 2013. It’s also seeking fresh loans from China, which has already heavily invested in transport and energy, as well as Saudi Arabia and some other Muslim countries.