UK department store chain Debenhams has revealed plans to close up to 50 underperforming stores over the next three to five years as part of efforts to generate cash, reduce debt and reshape store estate.
The company will focus on future investment in up to 100 stores and develop a new lower-cost approach for 20 stores.
According to the retailer, the comprehensive review of store portfolio will address structural challenges and drive profitable growth.
The company is also planning to reduce additional annualised costs of up to £50m.
The retailer is also seeking cash exceptional charges of £12.3m and non-cash exceptional write-downs of £512.4m, primarily relating to store and lease provisions, systems and impairment.
Debenhams CEO Sergio Bucher said: “It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging.
“Working with our new CFO Rachel Osborne and the board, I am determined to maintain rigorous cost and capital discipline and to prioritise investment to achieve profitable growth. At the same time, we are taking tough decisions on stores where financial performance is likely to deteriorate over time.”
The retailer has also announced that it has registered a 12% above-market digital growth supported by improved mobile and customer experience, as well as sustaining a market presence in the beauty sector with a focus on digital innovation.
It has enhanced in-store experience for customers, with nine stores trading in a new design format and service model.
Bucher added: “Debenhams remains a strong and trusted brand with 19 million customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market.
“With a strengthened balance sheet, we will focus investment behind our strategic priorities and ensure that Debenhams has a sustainable and profitable future.”