Retailer Debenhams has reported a significant drop in profits for the year to August 30th.
The UK's second largest department store chain announced a 24.8 per cent fall in annual profits despite like-for-like sales growing by one per cent. Debenhams stated that pre-tax profits stood at £87.2 million for the period. One of the driving forces behind this decline was the warm winter weather experienced at the end of 2013.
Debenhams chief executive Michael Sharp conceded that the first half of the year had been challenging but highlighted some positive notes in the company's financial results. The retailer had seen online sales grow by 17.6 per cent to £430.7 million, accounting for 15.3 per cent of 2014's total. It was up on the 13.2 per cent recorded 12 months earlier.
The company's shares had fallen by over 20 per cent during the course of 2014 following a profit warning and a decision to heavily discount items to move stock. However, despite the release of its financial results Debenhams opened trading at 08:54 BST on Thursday (October 23rd) 0.48 per cent up to 63.10. It has been recovering steadily since a big drop earlier in the month.
Mr Sharp said: "After the challenges we faced in the first half, everyone in the business has been focused on addressing the issues we identified and on delivering on the priorities we set out in April to deliver long-term sustainable growth.
"Our performance in the second half reflects this, with operating profit up on the previous year."
Debenhams will be looking forward to a more profitable Christmas period and it already has new store openings in the pipeline. The retailer will launch new outlets in both Scunthorpe and Borehamwood scheduled for 2015. This will add a further 67,500 sq ft to its estate and be complemented by a further ten stores later in the year.
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