Long-term leases to hinder uncertain turnaround of struggling department store

Future aggregate minimum payments under ‘non-cancellable’ operating leases amount to more than £4.5bn at Debenhams (DEB), according to the ailing department store operator’s 2017 annual report and accounts. The fact the hard-pressed British brand is locked into very long-term leases will hinder CEO Sergio Bucher’s attempts to turn round Debenhams. Disappointing Christmas sales and a return to heavy discounts lay behind a severe profit warning (4 Jan), which has prompted brokerage Liberum Capital to downgrade its full year pre-tax profit estimate by 35% to £52.1m.

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