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Debenhams looking for fresh funding, Christmas sales weak

Reuters  |  LONDON 

By Kate Holton

LONDON (Reuters) - British department store group is in talks with lenders and looking to bring in new sources of funding as it battles for survival following another plunge in sales.

The 241-year-old group said on Thursday sales fell 6.2 percent at its main British business in the 18 weeks to Jan. 5, and by 3.6 percent over the six-week trading period.

Once the country's biggest department store chain, has reported a string of profit warnings as it failed to keep pace with consumers moving online and to cheaper outlets, hammering its shares and wiping 80 percent off its market value.

Striving to avoid the fate of collapsed rival and House of Fraser, which was rescued by Sports Direct-owner Mike Ashley, the company has launched a programme to close 50 of its underperforming stores, putting about 4,000 jobs at risk.

said net debt remained within the rules of its agreements but it had opened talks with its lenders about refinancing its borrowings and could seek to bring in new sources of funding to bolster its balance sheet. Asset disposals have been put on hold during the talks, it added.

Retailers are struggling with a slowdown in spending amid uncertainty whether Britain will manage an orderly withdrawal from the in less than three months.

"We responded to a significant increase in promotional activity in the market, particularly in key seasonal categories, in order to remain competitive," Bucher, a former Amazon, and executive, said in a statement.

Debenhams said the changes it was making were working, with digital sales improving and trading in newly designed stores outperforming the rest of the chain.

It said it remained on track to hit an annual profit target of just 8.2 million pounds ($10.5 million) after saying it would find 80 million pounds of costs to remove.

"We have worked hard to deliver the best possible outcome in very uncertain times for retailers," Bucher said.

($1 = 0.7839 pounds)

(Reporting by Kate Holton, Editing by Paul Sandle and Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 10 2019. 15:21 IST