NEWS

Debenhams finance chief resigns following profits warning

Published on: 2nd January 2014

Debenhams finance boss Simon Herrick has resigned shortly after the department store chain’s profits warning following disappointing Christmas trading.simon-herrick300

Mr Herrick has stepped down from his post as chief financial officer with immediate effect, although he will not leave the company formally until February 7th 2014. Finance director Neil Kennedy will take on the role on an interim basis.

There was no reason given for his departure, but the move comes after Debenhams warned on Tuesday 31st December 2013 that profits were expected to fall by as much as 26% due to its failure to entice shoppers in the days leading up to Christmas, sparking a 12% shares slide.

Investors are said to have been angered by guidance provided to analysts this year, with the City caught off guard by an earlier profits warning in March and unexpected costs revealed when full-year results were announced in October.

Mr Herrick has also been criticised over a so-called “Santa tax” letter hitting suppliers with demands for discounts days before Christmas.

Debenhams said earlier this week that half-year pre-tax profits were expected to fall to around £85m from £114.7m the year before, after discounting ate into a 0.1% like-for-like sales increase for the 17 weeks to December 28th 2013.

It was the group’s second profits warning in less than a year, with poor trading at the start of 2013 seeing profits fall 2.7% to £154m for the 12 months to August 31st.

Chief executive Michael Sharp insisted the chain was battling against an “extremely difficult environment” that led many retailers to slash prices in the festive run up. The group also blamed bad weather for having an impact on clothing sales, which fell over the 17-week period.

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