UK’s Debenhams to close 50 stores as posts biggest loss in 240-year history

Shoppers walk past a Debenhams shop in Oxford Street, central London. (AFP)
Updated 25 October 2018
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UK’s Debenhams to close 50 stores as posts biggest loss in 240-year history

  • Last month, Debenhams denied it was actively planning a major cull of its 166-store UK estate
  • Debenhams shares were down 2.4 percent at 8.3 pence in early trading

LONDON: Struggling British department store chain Debenhams is closing 50 of its underperforming stores, putting around 4,000 jobs at risk, as write-downs in the value of its business led to a record full-year loss of nearly 500 million pounds ($645 million).
Chief Executive Sergio Bucher said he was “taking decisive steps to strengthen Debenhams” in a challenging market.
“We are taking tough decisions on stores where financial performance is likely to deteriorate over time,” he said on Thursday.
Bucher, a former Amazon executive, is trying to keep Debenhams relevant to British shoppers who are increasingly buying online and spending less on clothes.
The cuts are deeper than Bucher’s original plan to close 10 stores, downsize others and renegotiate leases and rents on its estate.
Last month, Debenhams denied it was actively planning a major cull of its 166-store UK estate.
“We want to have fewer but better stores, with a better shopping experience,” he told BBC radio.
“We want to grow our online business and we want the whole of the organization to be more profitable.”
Debenhams shares were down 2.4 percent at 8.3 pence in early trading.
The British retailer, which has issued three profit warnings this year, took exceptional charges of 512.4 million pounds relating to leases and goodwill, leading to a statutory loss of 491.5 million pounds, the biggest in its 240-year history.
Underlying pre-tax profit for the year to Sept. 1 slumped 65 percent to 33.2 million pounds, a result that Bucher said reflected “a tough year for retail.”
Debenhams is not the only retailer that has suffered on Britain’s high street.
BHS went bust in 2016, House of Fraser was bought out of administration in August by Mike Ashley’s Sports Direct and even market leader John Lewis has warned on profit.
Sports Direct owns just under 30 percent of Debenhams but has ruled out a bid.
Bucher told BBC radio that the number of jobs losses from the store closures over the next three-to-five years had not been quantified.


Saudi Arabia, Pakistan ‘to sign deals worth up to $20 billion’

Updated 16 min 40 sec ago
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Saudi Arabia, Pakistan ‘to sign deals worth up to $20 billion’

  • More than 30 public and private companies are poised to invest in Pakistan, including Saudi Aramco, SABIC and ACWA Power
  • The sectors targeted for Saudi investment include oil refining, petrochemical, mining, construction, power generation, agriculture and glass

KARACHI: Saudi Arabia is expected to announce investments in Pakistan worth between $15 billion and $20 billion during Crown Prince Mohammed bin Salman’s official visit, according to the head of Pakistan’s Board of Investment.

The Kingdom and the UAE in recent months have offered Pakistan more than $30 billion in loans and investments to tackle a soaring current-account deficit. The Saudi crown prince is due to sign off on his country’s deals, including one for a $10 billion oil refinery in Pakistan’s Gwadar Port.

“We are expecting Saudi investment in the range of $15 billion to $20 billion based on the interest investors have expressed so far,” said Haroon Sharif, minister of state and chairman of the Board of Investment.

Sharif previously said that Pakistan expected investments worth about $15 billion from Saudi Arabia over the next three years, and about $40 billion from Saudi Arabia, the UAE and China combined in the next three to five years.

Mian Mehmood, the Pakistani head of the Pakistan-Saudi Arabia Joint Chamber of Commerce and Industry, said recently that in addition to the oil refinery project, a further $10 billion is expected to be invested in sectors other than oil and gas, bringing the total to $20 billion.

“About 25 to 30 agreements are expected to be finalized during the visit of the crown prince,” said Mehmood who recently led a business delegation to the Kingdom to explore bilateral investment and cooperation opportunities.

More than 30 public and private companies are poised to invest in Pakistan, including Saudi Aramco, SABIC and ACWA Power, he added.

The sectors targeted for Saudi investment include oil refining, petrochemical, mining, construction, power generation, agriculture and glass.

“Ten Saudi manufacturing companies working in construction and allied materials, and 10 companies interested in the food processing sector will come to sign agreements,” Mehmood said.

Speaking this month during a visit to Gwadar to inspect the site of the $10 billion oil refinery, Saudi Energy Minister Khalid Al-Falih said: “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China-Pakistan Economic Corridor.”

Work on the refinery is expected to begin within 18 months.

“Once the project starts production, the country would be able to save about $2 billion in foreign exchange on costly imports,” said Samiullah Tariq, the head of research at investment firm Arif Habib Limited.