Former Amazon executive Sergio Bucher has his work cut out to prevent steep declines in profit at high street retailer Debenhams (DEB).
Bucher took the role as Debenhams chief executive in October and will deliver a strategy update to shareholders in April.
Analysts aren't holding their breath.
Today, broker Haitong Research predicted a £29m drop in pre-tax profit at the department store by late 2018 as analyst Tony Shiret slashed his forecasts.
£29 MILLION PROFIT SLUMP
Analyst Shiret admits half of the reduction would have occurred in late October - if he remembered to provide an update on the stock.
Pre-tax profit estimates have been cut for August 2017 and August 2018 by 11% and 14% to £99m and £85m, respectively. This is a significant drop in profit from £114m in 2016.
Debenhams delivered a 0.5% rise in like-for-like sales in constant currency in the 18 weeks to 7 January, according to a trading statement yesterday.
FRESH THINKING NEEDED
In October, we flagged better-than-expected full year results from the department store on growth from its beauty division.
Analyst Shiret believes the retailer needs to think outside the box and deliver better clothing sales, instead of shifting its product mix towards the low-margin gifts and cosmetics sector.
New cost-effective plans are needed for Debenhams to break out of its downwards profit spiral, Shiret adds.
