Debenhams shares fell nearly 7% yesterday after analysts at Goldman Sachs warned the retailer’s customers are shopping on its website instead of, not as well as, in its stores.
In a report, in which they downgraded its rating to “sell”, the retail analysts said Debenhams was “wrestling” with the shift in business online, which is “cannibalising” sales rather than adding to them, the Daily Mail reports.
They said “tough times lie ahead” for a number of companies as online sales grow, and Debenhams is one of the more vulnerable retailers.
Debenhams’ share price tumbled 7% following the report’s publication.
Debenhams reported a 7.3% increase in profit before tax to £113.5m for the year to August 29, breaking a four year cycle of profit decline. Group like-for-like sales at the department store group were up 2.1% in constant currency.