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What went wrong for Debenhams and how can the department store chain turn things around?

Debenhams developed a reputation for big discounts, causing customers to wait for promotions (Getty) In that time, Debenhams has faced the whole gamut of challenges affecting all UK retailers, as well as a few issues of its own making. The most pressing of those problems is being saddled with too many stores on long, expensive leases signed http://tickettonewyorkvkyww.eblogmall.com during the private equity years. Longer leases might have meant cheaper rents at the time, lowering costs and boosting short-term returns. But now that the company needs to slim down, those leases are a huge burden. Last year, Debenhams shelled out £221m in rent, leading Hargreaves Lansdown analyst George Salmon to remark earlier this year that the company had “little more flexibility than a supertanker”. Such large fixed costs have seriously hurt the department store’s ability to battle the existential threat posed by Amazon and other online competitors. Meanwhile, rising business rates and the minimum wage are also dragging on profits. A further problem is Debenhams’ reputation, developed throughout the 2000s, for relying on Blue Cross discount days. The tactic boosted http://marketplace8um.sojournals.com sales but encouraged customers to wait for promotions before buying, further squeezing the bottom line.

For the original version including any supplementary images or video, visit https://www.independent.co.uk/news/business/analysis-and-features/debenhams-what-went-wrong-sales-down-share-price-department-store-chain-a8531726.html

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