Debenhams has reported a 44% fall in full-year profits following heavy investments to restructure the business and grow sales.
Profit before tax plunged to £59m in the 52 weeks to September 2, 2017, while underlying profit before tax fell 16.6% to £95.2m.
The dramatic decline was largely due to exceptional charges of £36.2m related to the closure of its distribution centre in Northampton, 10 regional warehouses and two stores. It has also exited four franchise markets as part of the restructure.
Debenhams CEO Sergio Bucher said the retailer is making “good progress” in implementing its new strategy “Debenhams Redesigned” and is encouraged by the results from its initial trials.
Debenhams Redesigned includes the trial of new store formats and a makeover of its online sales platform.
Earlier this month, the retailer upgraded its mobile website in partnership with Mobify, making it significantly faster and more responsive.
“There is a lot to do but I am delighted with the enthusiasm and flair shown by my colleagues as we embark on this journey. I’d like to thank the whole team for delivering these results against a background of rapid change in the business,” Bucher said.
“The environment remains uncertain and we face tough comparatives over the key Christmas weeks. However, we are well prepared for peak trading and the early signs from our activity to date confirm that we are moving in the right direction towards a successful and profitable future for Debenhams.”
Group sales increased by 2% to £2.9bn during FY17, helped by an 11% growth in its international arm. UK sales remained unchanged at £2.4bn.