UK-based department store Debenhams last week revealed a plan to significantly reshape its business, including a comprehensive review of its store portfolio that will lead to the closure of up to 50 stores over the next three to five years.

The announcement, made on October 25, came as Debenhams reported a statutory loss of £491.5 ($891.24 million) in FY18.

“It has been a tough year for retail in 2018 and our performance reflects that,” Debenhams chief executive Sergio Bucher said.

“We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging. Working with our new CFO Rachel Osborne, and the board, I am determined to maintain rigorous cost and capital discipline and to prioritise investment to achieve profitable growth.”

The department store saw an underlying profit before tax of £33.2 million ($60.2 million), which was undercut severely by the write-down of exceptional items related to goodwill and store impairment, lease provisions and system write-offs of £512.4 million ($929.13 million).

The company’s digital growth accelerated by 16 per cent in the second half of the year, outpacing the overall market according to the retailer, while mobile demand grew by approximately 20 per cent.

Moving forward, Debenhams has outlined a strategic review of its business focuses, delivering five priorities moving forward: delivering above-market growth in digital sales, sustaining leadership in beauty, revitalizing its fashion product, reinventing the in-store experience and an acceleration of cost reduction.

Debenhams plans for digital to amount for approximately 30 per cent of its business in future, compared to the approximately 20 per cent it currently holds.

“Our transformation strategy is gaining traction, with positive results from new products and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market,” Bucher said.

“With a strengthened balance sheet, we will focus investment behind our strategic priorities and ensure that Debenhams has a sustainable and profitable future.”

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