Debenhams Share Discussion Threads

[simon templar qc] 18/12/2017 20:56

Bloomberg GLOOM on Debs...



Who will go to the wall first say Bloomberg!

[simon templar qc] 18/12/2017 20:21

Edmund,

The JL guarantee is reasonably fair, have used them in the past and more than often will match.

They tend not to argue if something goes wrong no quibble guarantee, where others want to repair.

I would rather deal with JL than anyone else to be fair.

[edmundshaw] 18/12/2017 17:50

"Never Knowingly Undersold" is not really true in my view.

Check out the link below. On many electrical goods it just doesn't seem to hold water at all due to variance in warranties (which are all daft anyway as mostly consumer legislation gives you better protection anyway). In addition, JL doesn't price match with anything sold online. I have looked at serious camera equipment there and the prices were just ridiculous. Some things are just better bought online, and cameras are definitely in that category. Bottom line, JL is not cheap.

hxxps://www.moneysavingexpert.com/news/shopping/2011/02/flaws-revealed-in-john-lewis-price-guarantee

[simon templar qc] 18/12/2017 17:06

Well they wont be making a lot on furniture all are suffering.

As for fashion, well we all know that's in decline. In fat I wouldn't mind betting some is loss making.

White goods another problem area John Lewis will not be beaten and most people would prefer to deal with them.

So its all down to cosmetics a lower margin product to save the day as Debs does a third of the market!

Its a mess. I wouldn't like to guess what the overheads are at the Manchester store but the owner wont be likely to reduce rents to support Debenhams if they start to lose money. 5% seems a fair figure to me for such a prime position.

A I

Then there is dilapidation all leases have clauses on duties of leaseholder. I bet they aren't doing a store up to a good standard with the size of their Manchester store it would cost a hefty sum painting and carpeting alone.

One last point the pay for top executive alone over 2.5% of all profits!

[edmundshaw] 18/12/2017 16:02

Yes, kazoom, it is really amazing any big store ever made any money.

By the way, that store is about 2.3% of the total floor area for Debenhams. The total turnover for Debs last year was £3.0 billion. So pro rata the turnover for that store would be roughly £70m per annum (probably quite a bit more as this is a prime location).

£4.5m per annum is not unreasonable as rent for a turnover like that. But this does underscore the potential for improved profitability if the space can be used more efficiently, with click/collect and in-store franchises.

As far as the gyms are concerned, I think this will be a pretty small part of the business (if it even takes off). It is currently being trialled in just 3 stores. It is obviously a sensible initiative to make underutilised floorspace "sweat a bit". Obviously gyms will not be in-store, let alone positioned next to the perfume counter, any more than my local Debenhams' Greek restaurant is in-store (it is virtually a "shop next door").

[kazoom] 18/12/2017 14:04

Hold the front page!

A large store has large overheads.

Wow. Who knew?

[topazfrenzy] 18/12/2017 13:02

You need to get out more and shake that brain fat about.

[topazfrenzy] 18/12/2017 13:00

Simon QC, do you suffer from hairy cankles and major obesity?

[american idiot] 18/12/2017 11:10

Lets come back to Templars post

Simon Templar QC15 Dec '17 - 17:46 - 3253 of 3266
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Debenhams site property owner sells site for £87 million yielding 5%! Debt has a lease until 2039!

Well the new buyer sure isn't going to reduce its rents, some property companies obtain yields of 10% to 15%. Panther is a small property developer but has yields well over 5%.

Maybe the owner was worried about the future for retailers!



edit:

Yield of 5% equates to a rent of about £4,350,000 a year.

Upward rent review probably every 5 years.

..............

Lets break down the rent even furthur.

£4,350,000 a year rent equates to £83,653 per WEEK rent

ADD onto that sum business rates which I have no idea at all but would expect this to be a substantial amount based on the value of the property.(Circa £40k - £80k per WEEK ?)

I would suspect the lease is a FRI lease (as most commercial leases are) so theres costs to insurance the property and to maintain the property.

Then theres utility costs and staffing costs etc etc etc.

Thats a whole lot of make-up this store has to sell each week just to reach breakeven.

Mission Impossible (IMO)

[bookbroker] 18/12/2017 10:50

This company is a ringer, it is the Woolworths of the upper end of the department store chain, businesses are now much more specific, this just sells an assortment of pretty moderate brands!

[ltcm1] 18/12/2017 10:38

I just remember how quickly Woolworths unravelled at the end.

Having said that, I do see Debs having takeover potential in that as another poster noted, they do sell a hell of a lot of makeup.

It is obvious to me at least that the 2.3BN of sales model has got to go, they have to get this risk factor down, they are not M&S.

[simon templar qc] 17/12/2017 18:16

Shoppers hit the High St on news of retailers slashing pries...



Debs seem to be giving the biggest discounts but how will that affect margins?

Various possibilities include write down of stock!

Any other suggestions welcome?

[simon templar qc] 16/12/2017 22:40

Wake up NY and look at what is really happening out there get your head out the sand.

I see multiple shop shutters going up in 2018 as more people lose their jobs less money to spend.


edit

By the way if you had bothered to read my posts properly I see none listed retailers going to the wall, nothing to gain for me saying all this.

[ny boy] 16/12/2017 22:29

What stocks are you invested in?

[simon templar qc] 16/12/2017 22:25

NY Boy.

I am a realist not got a head spinning with too much drink!

[ny boy] 16/12/2017 22:19

Bet you’re a bundle of laughs of Christmas 🙄

[simon templar qc] 16/12/2017 22:18

QANTAS

You need to focus on what is happening in the UK right now!

Footfall is down both on the High St and in out of towns/department stores, partly the weather but spend is tight.

As a result retailers getting ever so worried slashing prices to try and increase sales.

This will result in wafer thin or no margin of profit.

Forget Trump look at what is in front of your eyes not distant objects which has little relevance.



In the new year I forecast multiple casualties the shorters not playing a blind game.

edit:

As for US you cannot compare their economy to the UK we are reliant on Europe for most of our trade. The US could cut themselves off from the rest of the world and be self sufficient.

[qantas] 16/12/2017 21:01

Please do your own research

[simon templar qc] 16/12/2017 12:07

Its not just Poundland.

Steinhoff in deep trouble Bensons beds, New Look, Harveys Furniture are in imminent danger, Steinhoff over borrowed. and having to restate their results, there is probably a very big black hole.

edit:

Steimnhoff bought all the above, Harveys went into administration and with a downturn in household goods, they look at high risk. New Look is losing money.




Retailers offer even bigger discounts to temp shoppers ....

[american idiot] 16/12/2017 10:33

The Guardian: Poundland faces potential difficulties with suppliers after an insurance company reduced its cover on credit for those selling goods to the cut price chain.

.............

Uh oh.......There lies trouble ahead for Poundland.

[terminated] 15/12/2017 19:41

Yea it says you have to be stupid to buy food from marksys.

[simon templar qc] 15/12/2017 19:30

Margin forecast for:

Marks 5%

Debenhams 1.9%

Says a lot!

[simon templar qc] 15/12/2017 17:46

Debenhams site property owner sells site for £87 million yielding 5%! Debt has a lease until 2039!

Well the new buyer sure isn't going to reduce its rents, some property companies obtain yields of 10% to 15%. Panther is a small property developer but has yields well over 5%.

Maybe the owner was worried about the future for retailers!



edit:

Yield of 5% equates to a rent of about £4,350,000 a year.

Upward rent review probably every 5 years.

If they had to shut the store it would be a hefty hit!

They need a very big gym to take up excess space.

[niggle] 15/12/2017 17:01

Yup and the slumped at the end - could be quite vicious on Monday

NY Boy: including the solvent and insolvent folks

Isn't that everyone?

[simon templar qc] 15/12/2017 16:27

NY Boy

No one gets paid for deramping it would be illegal. You are desperate!

The shorts go up to a new high...