WATFORD, England (Reuters) - The boss of Britain’s Debenhams (DEB.L) came out fighting on Monday, saying the department store chain’s troubles had been exaggerated and insisting the business has a future.
Speculation about Debenhams’ future has increased since rival House of Fraser collapsed into administration in August and was snapped up by Mike Ashley’s Sports Direct (SPD.L).[nL5N1V118Q]
The 240-year-old Debenhams has issued three profit warnings this year and its shares have lost over 70 percent of their value.
Last week the firm rushed out a trading statement to say it would make analysts’ profit forecasts for the 2017-18 year and denied it was planning mass store closures in its 166-store UK estate.
“There’s a lot of noise right now in the press about the health of the company,” Chief Executive Sergio Bucher told reporters at a capital markets event held at Debenhams new store in Watford, north of London.
He said the retailer has “a strong foundation” with 19 million customers, a 97 percent brand awareness, is growing online sales faster than the overall market, has annual turnover of 3 billion pounds ($3.94 billion) and is profitable.
“Sometimes it feels almost surprising to say that after what I’m reading in the press,” said Bucher.
“We’re here to create shareholder value and we aim to do that by delivering growth in the company,” he said.
He said Debenhams would provide more details on its options to strengthen its balance sheet when it publishes annual results on Oct. 25. It has forecast year-end net debt of about 320 million pounds, which compares to Debenhams’ current equity market capitalisation of about 121 million pounds.
Bucher, a former Amazon (AMZN.O) executive, is in the second year of a turnaround plan.
He has closed two of 10 stores identified for closure, wants to downsize 30 others and renegotiate leases and rents on 25 stores up for renewal over the next five years. He has also cut costs and refinanced.
The Watford store represents Bucher’s “vision of the future” for Debenhams, with an enhanced beauty hall, curated fashion ranges and more customer services, such as personal shopping, all integrated with the firm’s digital offer.
Sports Direct owns 29.7 percent of Debenhams but has ruled out a takeover bid.
Bucher said the firm was, however, in talks with Ashley to develop womenswear sports areas in some of its stores.
Reporting by James Davey; Editing by Adrian Croft