10 Sep 2018
Posted in Press Release
Debenhams reaction to press speculation fails to address concerns, says GlobalData
Following today’s (Monday 10 September) release from Debenhams in relation to media speculation over its future,
Patrick O’Brien, UK Retail Research Director at GlobalData, a leading data and analytics company, offers his view:
‘‘Debenhams statement reacting to media speculation over its future has singularly failed to address investor concerns. While trying to give reassurance with regards to its short term performance – earnings and debts are running at expected levels, and the new season has seen ‘positive trends’ – it ignored the real reason why investors had punished its stock this morning: fear that its decision to bring in advisors KPMG is a prelude to a CVA, or worse.
‘‘While it would seem too early to try to foist a CVA on landlords who are already seething at what they deem to be an inherently unfair process being abused by retailers, Debenhams appears to be softening them up for some form of negotiation.
‘‘Debenhams may still be profitable and has the possibility of bringing in £200m plus from the sale of Magasin du Nord, but its long term performance is still going to be under huge pressure, and with it carrying £4.6bn of lease commitments (as of September 2017), both it and its landlords know that these will need to be addressed soon unless there is a marked upturn in the fortunes of the UK high street.’’
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