Debenhams Regulatory News (DEB)

This announcement contains inside information

5 March 2019

DEBENHAMS PLC

Trading Update

Debenhams today announces an update on trading for the 26 weeks to 2 March 2019.

As set out in the trading statement of 10 January 2019, the first 18 weeks of our financial year saw Group gross transaction value ("GTV") decline (5.6)%, with LFL down (5.7)%. The UK was down (6.2)% with International down (3.5)%. Digital sales grew by 4.6% across the period. 

In the subsequent eight weeks, Group GTV has moderated its decline to (5.0)%, with LFL of (4.6)%. Overall, for the 26 weeks of H1, to 2 March 2019[1], Group GTV has declined (5.4)%, with LFL of (5.3)%. The UK was (6.0)% with International down (2.3)%. Digital sales have grown by 2.0% across the period. The annualised £80m cost saving programme is on track, and we expect the first ranges resulting from our sourcing partnership with Li & Fung will be in stores in the current season. 

Further to our announcement of 12 February regarding the additional £40m bridge facility, discussions with stakeholders have now progressed to include options to restructure our balance sheet in order to address our future funding requirements, and are continuing constructively.

While trading headwinds have moderated in recent weeks, this process is likely to be disruptive to our business in the coming months. Taken together with macroeconomic uncertainties and increased financing costs as a result of additional working capital needs, this means that the Group's statement made on 10 January that we were "on track to deliver current year profits in line with market expectations" is no longer valid. We will provide a further update with our interim results announcement.

Sergio Bucher, Chief Executive of Debenhams, 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, whilst 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."

ENDS

Enquiries:

Analysts and investors

Debenhams PLC Rachel Osborne, CFO

Katharine Wynne, Director of Investor Relations

020 3549 6304

Media

Brunswick Group Tim Danaher/Craig Breheny/Fiona Micallef-Eynaud

020 7404 5959

debenhams@brunswickgroup.com