DEBENHAMS MIGHT CLOSE 10 OF IT’S STORES FOLLOWING DROP IN PROFITS

Debenhams will consider closing up to 10 of its 176 stores under a review announced by its new chief executive, Sergio Bucher.

The company’s shares have fallen a third over the last year and it says more investment is required to improve its mobile systems, supply chain and store estate.

It is consulting on the closure of the DHL-run Lodge Farm distribution centre in Northamptonshire, which employs 220 staff and would close in two years.

Ten smaller in-house warehouses could also close.

Debenhams said it hoped many staff could be redeployed.

The plans were revealed alongside half-year results showing a 6.4% fall in pre-tax profits to £87.8m, though UK like-for-like sales rose 0.5%.

Its shares were down 3% on the news.

Mr Bucher, a former Amazon executive who took over in October, said the overhaul would see the stores potentially close over the next five years.

He said that, while none of the stores were unprofitable, those under review had been identified as possibly becoming loss-making in the future.

As part of his ‘Fix the Basics’ plan, around 2,000 staff will also be moved to customer-facing roles.

The group will also axe some in-house brands and leave some of its international markets, with more details expected in October.

Stores will be de-cluttered with a 10% reduction in stock options, and stock will be replenished faster.

Mr Bucher said: “Our customers are changing the way they shop and we are changing too.

“Shopping with Debenhams should be effortless, reliable and fun, whichever channel our customers use.

“We will be a destination for ‘social shopping’ with mobile the unifying platform for interacting with our customers.”

The department store said its online performance during the half-year had been driven by a 64% increase in mobile orders.

Mr Bucher added: “If we deliver differentiated and distinctive brands, services and experiences both online and in stores, our customers will visit us more frequently.

“And, having simplified our operations to make us more efficient, we will be able to serve them better and make better use of our resources.”

Debenhams, the country’s second-largest department store group, employs 19,000 people in its stores.

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