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Fresh profit warning at Debenhams


It would be more reassuring if Sergio B actually told the truth. His statement is all hot air and spin. He keeps citing Li & Fung as the saviour. The only upside to the L&F deal is that Debenhams could reduce the fixed costs of the offshore offices. The prices Debenhams will then have to pay for the goods will be higher than they are currently paying. The only way L&F could potentially improve the prices is to drop the quality. It needs to be remembered that L&F were always there as an option to supply Debenhams but could never compete on price and quality hence got next to no business. If one looks at the actual deal with L&F the increased cost prices offset by the reduced fixed cost of the offices Debenhams will still make a nett loss. Only winner is a L&F. The other key factor on why Debenhams engaged in this L&F deal is that they are willing to supply Debenhams whereas many of the core suppliers and factories are running for the hills due to the risk. This is a really important factor. Further to this Sergio states the new L&F ranges will be in this season. No one within Debenhams has a clue what he is referring to - all smoke and mirrors to mask the total underperformance of Debenhams.

Posted date

6 March 2019

Posted time

4:57 am