London :British department store chain Debenhams warned on profits Tuesday, sparking a slump in its share price and compounding the gloom for large UK retailers.
Debenhams said that annual profits were expected to miss expectations, blaming falling sales, fierce competition and weak consumer spending.
The news sent Debenhams’ share price tumbling 20 percent in morning deals.
“Against a background of increased competitor discounting and weakness in key markets, trading in May and early June has been below plan,” said Debenhams, which has 240 stores worldwide including 176 in the UK and Ireland.
In a statement, the group said that it expects pre-tax annual profit of between �35 million and �40 million ($46 million and $53 million, 40 million euros and 46 million euros).
Analysts’ consensus forecast had been for �50.3 million.
In later morning deals, Debenhams’ share price recovered to stand at 18.40 pence, but still down 6.12 percent from Monday’s closing level.
Major UK retailers are increasingly facing tough times in the face of intense online competition from the likes of US giant Amazon.
