Debenhams has attempted to reassure investors after it was revealed the department store had appointed KPMG to help improve its performance.
After media reports said the group was considering a company voluntary arrangement (CVA) to allow store closures and cut rents, shares fell by 16 percent 11.5p.
Sergio Bucher, the chain’s chief executive, said: “The market environment remains challenging and underlying trends deteriorated through the summer months.”
The company is “well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge,” he added.
Despite attempts to reassure investors, Debenhams has to admit low annual profits.
The retailer said that profit will be £33 million, compared with previous guidance of £35-40 million.
The new estimate is in line with the current market forecasts.
“As we stated in June, the board continues to work with its advisers on longer term options, which include strengthening our balance sheet and reviewing non-core assets. This activity is in order to maximise value for shareholders and protect other stakeholders, including our employees,” said Sir Ian Cheshire, the group’s Chairman.
Debenhams has issued three profit warnings just this year and has also lost two-thirds of its share price value since the start of this year.
The future of the department store is in question after fellow department store House of Fraser fell into administration last month and was rescued by Sports Direct’s Mike Ashley in a £90 million.
Ashley is in negotiations with landlords and suppliers to try and keep 80 percent of House of Fraser’s 59 stores open.
Shares in the group (LON: DEB) are up 4.17 percent at 11,98 (1424GMT).
