The company’s shares lost almost a fifth of their value on Monday morning after weekend reports suggested Debenhams had brought in advisers from KPMG to explore a number of options, including a possible company voluntary arrangement (CVA).
In response to the speculation, Debenhams said it has been working with its advisers since the summer. It also gave a brief overview of its recent performance and outlook, but there was no mention of a CVA.
“As we stated in June, the board continues to work with its advisers on longer term options, which include strengthening our balance sheet and reviewing non-core assets,” said chairman Ian Cheshire.
The struggling department stores operator is due to publish its annual results next month, when it expects to report an adjusted pre-tax profit of £33mln and underlying earnings (EBITDA) of £157mln. Net debt is forecast to come in at around £320mln.
There were mixed messages on market conditions, with chief executive Sergio Bucher stating that the “environment remains challenging and [that] underlying trends deteriorated through the summer months”.
That contrasted the body of the statement itself, which said the early weeks of the new season “have shown more positive trends”.
Getting ready for Christmas
Bucher added that a number of initiatives to boost sales which it had been testing were now ready to be scaled up ahead of the peak Christmas trading period.
“Having put in place a leaner operational structure and strong leadership team, and taken action to strengthen our financial position, we are well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge,” said Bucher.
The statement failed to reverse the earlier losses, with the shares remaining 16% down at 10.8p.