TWO of the major department store chains in Bournemouth have revealed figures laying bare the slump in Britain’s high streets.
Debenhams has seen profits fall nearly 85 per cent, while House of Fraser is planning a restructuring which could mean store closures and jobs losses.
Earlier this year, a Bournemouth University academic said he could not imagine the town having all its three major department stores in five years’ time.
Debenhams revealed that bottom-line pre-tax profits had fallen from £87.8million to £13.5m over the 26 weeks to March 3. It said it took a major hit in the final days of the trading period after the snowy weather dubbed the ‘Beast from the East’ caused it to temporarily close around 100 stores.
Once the costs of a strategic review and restructuring were stripped out, underlying profits fell 51.9 per cent to £42.2m.
Debenhams blamed a “disappointing Christmas season” for increasing competitor discounting and hitting underlying earnings for the UK, which fell 39.3 per cent. Like-for-like sales dropped 2.2 per cent.
Chief executive Sergio Bucher said: “It has not been an easy first half and the extreme weather in the final week of the half had a material impact on our results. But I am hugely encouraged by the progress we are making to transform Debenhams for our customers.”
He added: “We are holding share in a difficult fashion market, and, in other categories such as furniture, exciting new partnerships have the potential to transform our offer.”
Debenhams has closed two stores since October and has identified a further 10 that could go.
However, the company is tied into long-term leases in many of its stores, meaning it must shed staff to cut costs. In February, 320 staff were made redundant in a shake-up of middle-management.
House of Fraser has appointed KPMG to advise on a restructuring.
Options could include a company voluntary agreement (CVA), which would mean seeking agreement from landlords to cut rents and possibly shutting some of its 59 stores.
House of Fraser, whose Bournemouth store was formerly called Dingles, has 6,000 staff and 11,500 concession staff and is owned by Chinese conglomerate Sanpower.
Its suffered a drop in sales over Christmas and has started talking to some landlords to reduce the size of its stores.
Tony Brown, chief executive of Bournemouth-headquartered chain Beales, said: “I have some sympathy for both companies. The early Easter and the Beast from the East, followed by the prolonged wet spell, has put spring three to four weeks behind we now have to catch up.
“But the sun is out, we have a great town with fantastic shops, restaurants, and hotels, so let’s look at the positive. As Bing Crosby once sang, you have to eliminate the negatives to accentuate the positives.”
Beales saw a 4.2 per cent rise in sales at continuing stores in the six weeks that ended just after Christmas. It closed some loss-making stores under its own CVA process in 2016.
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