Debenhams Share Discussion Threads

[terminated] 01/8/2017 12:58

But didn't management just announce last month that there were on track to meet profit expectations for this year? And it's ok saying sterling has dropped 20% but Debenhams had hedged the dollar at over 150 for this year alone so it's surely wrong to state their costs have increased to 130m, that will occur only if they are paying 130 to GBP, which given they are constantly averaging their currency buys could take 2 years. That is a long term forcast based on the dollar not devaluing, which is more than likely. By then cost efficiencies from store closures and the improved store format could start to show through.The stuff you post is relevant to this sector but it's too general to make an evaluation of Debenhams performance.

[simon templar qc] 01/8/2017 10:39

John Lewis sales weekly update:



Week 26 up 2.5%

26 weeks (half year) up 1.6%

With an increase in store space of circa 4-5% like for like sales are clearly down on last year.

edit:

Shows how tough things out on the High St Wilko only made 16 million profit on 1.5 billion on sales. They do have £70 million in cash as a buffer. They need to think about combining with B&M imo. Oher than that they may take an interest from a large supermarket like B&M as from ASDA.

[simon templar qc] 29/7/2017 18:18

Fair cop its in the post. LOL

edit:

pvee...

To be fair I am not just bearish on most listed bricks and mortar retailers but all non listed retailer as well including Philip Green's Taveta group of companies. His profits have fallen badly as well in fact as he relies totally on fashion he group is also at risk. The profits and Taveta are circa £200 million on a 2 billion pound business.

I don't know how this will all pan out but I as the shorters believe there is bound to be a major casualty sooner or later.

Should Taveta hit the wall and or House of Fraser and or NEXT for that matter, Debenhams or Marks would both benefit.

edit:

Even the budget shops now suffering through minimum wage, inflation...

[grahamite2] 29/7/2017 11:51

Simon Templar QC, you are Crispin Odey and I claim my £5!

[pvee] 28/7/2017 23:11

I agree that DEB has a lot of challenges but be selective in what you quote, Simon

As a TNI investor I think I recall Odey got it all wrong in shorting the stock over a long period of time. These so-called experts have only one thing in common - manipulation of the price for their own ends

[simon templar qc] 28/7/2017 20:09

Interesting view from the FT

"A Crispin Odey, one of the hedge fund managers publicly short of Debenhams, recently explained his thinking behind the trade in a note to clients. He estimates the 20 per cent fall in sterling since the referendum means the retailer’s inventory has become £120m more expensive, and that if its normal inventory-to-sales ratio remains constant then this would mean sales must rise by nearly £350m — a near impossible task, he thinks."

[simon templar qc] 28/7/2017 14:25

Less than 200,000 shares traded after 6 hours is dismal. Where are the large buyers?

No one seems to have a clue what Mike Ashley is doing he has taken a large stake in French Connection yesterday, some think he will bid a lower price than the market price than the current market price.

[edmundshaw] 26/7/2017 15:57

Not to worry. The Corbyn government-in-waiting is due in 4 months time and Mr C will write off everybody's debts, and we can all trundle off into the sunset with a wheelbarrow full of cash. (Like they did in Germany in the 1920s...)

[simon templar qc] 26/7/2017 09:53

Less than 30 trades in 2 hours today sums up what I have said, trading is abysmal today.

edit: GDP

Growth figures out this morning don't give much hope. Retail was the highest growth contribution at a measly 0.09% bear in mind consumer credit is rising at 10% year!



With wage growth lagging inflation, this does not bode well for retailers. The BOE have given a number of warnings lately on too much relaxation of consumer credit.

The BOE was expecting growth of 0.4% in second quarter the actual figure 0.3% overall. I cannot see growth of 1.7 % this year its way too high.

[terminated] 26/7/2017 01:17

Yea there was someone on the sports direct thread with a similar stance. He had no investment either.

[libertine] 25/7/2017 11:37

Terminated
He doesn't know what the trades are.
He simply has an obsession with Debenhams for some reason, and will throw whatever he can at you to support his negativity.
Just click on his name and view his post history.
I`m not sure he even holds any shares in any company!

[simon templar qc] 25/7/2017 11:25

Terminated by a rough analysis of trades.

John Lewis sales up this week, excellent week for fashion...



Womenswear up 35.5% on contributed by "own label".

Total JL sales for 25 weeks up 1.6% with increase in store space about 4% like for like sales still falling.

[terminated] 25/7/2017 09:28

How do know small shareholders are selling up, how can you possibly know who owns the stock?

[edmundshaw] 24/7/2017 22:13

SportsDirect bailing in some more, now over 20%...

[simon templar qc] 24/7/2017 13:02

Small shareholders bailing out, looks like my target price of 40 pence could be broken soon on the downside, once it broken I will revise.

[terminated] 23/7/2017 22:03

Hard to believe you are invested here, you are the most negative.

Debs needs to get back to basics and I like the idea of creating more social space, the cafeteria and restaurants are always full. Personally I think the multi store concept under one roof are exactly the type of retailers that can survive as they are a convenient one stop experience, and the middle class shopper less affected by inflation. My girlfriend likes to go in for a walk about, but admittedly, women are mad creatures, if they can build on this experience it could be a game changer. And at the end of the day if stores do need to close they are increasing there online presence every year, it's close to 20% now. No idea what Mike Ashleys game is either but he has snapped up a lot of free float, some positive news and this could easily become a short squeeze. There are a lot of positives.

Above all a market cap of 540m would be supported by 60m profit and I just can see things getting that bad.

[simon templar qc] 23/7/2017 19:08

I do hope you are right I see at least one large BRICKS AND Mortar STORE hitting the wall it could be House of Frazer Arcadia, even John Lewis, time will tell but I am still negative on Debenhams.

[terminated] 23/7/2017 17:33

The big thing hanging over this is the currency challenge for next year, they have excellent hedging in place for this year but the average dollar buyback will indeed affect margin over the next 12 months. For me they need to look at their clothing ranges as most women I speak to say it is uninspiring, and for me personally I find the men's selection very old style. I know analysts are also concerned that leases need renegotiating in the next few months but for me they are in a very strong position for this as they can clearly show the high street is struggling and use this to negotiate favourable deals. The last thing they will want is to put Debenhams under pressure as their prosperity is interlocked.

As for a possible spending squeeze, they managed to hold it together after the 2008 crash when spending was at it worse.

[simon templar qc] 23/7/2017 14:04

Margins!

Tight margins if sales slow margins will come under increasing pressure. Sales need to be at full price and with continuing discounting and also online profit could be completely eroded.

That is what the shorters seem appear to think.

[terminated] 23/7/2017 12:56

What do you mean it's not making enough profit? How much is enough profit? 95m can be improved and one could argue given their 'revenue they should be making more but to insinuate they cannot continue as a viable business on even 80m is ridiculous.

In investment terms it is how much profit do they need to justify a higher share price. 95m this year and even if it errodes to 80m next year on currency depreciation issues it would still justify a higher market cap of 550m this year. It's making enough for that.

[simon templar qc] 23/7/2017 11:15

All very well stating where you think the company will survive but things could deteriorate very quickly at any time, all bricks and mortar stores are at risk Debenhams is not making enough profit and margins.

With a forecast of a recession its not surprising the shorts are increasing...

[terminated] 22/7/2017 17:50

There is a lot of doom and gloom around Debenhams lately but the trading update for the 15 weeks and the 41 weeks (financial year to date) to 17 June 2017 looks decent and highlight how cheap this stock really is.

Financial Highlights

· Group gross transaction value: 15 weeks (1.0%); 41 weeks +1.7%
· Group like-for-like sales: 15 weeks (0.9%); 41 weeks +1.8%
· Constant currency like-for-like sales: 15 weeks (2.4%); 41 weeks (0.7%)
· Digital sales growth: 15 weeks +7.9%; 41 weeks +12.6%
· Gross margin guidance unchanged, cost guidance tightened to +3%, +1% in constant currency
· We currently anticipate that 2017 profit before tax will be within the range of market expectations.

Profit estimate is 90-95m and it currently has a market cap of 540m approx. Revenue is predicted to rise and a focus on food is currently being received well.

Sure the dividend might be cut a few percent in September but people are talking of this going under is total nonsense.