Debenhams, the department store group that returned to the market in May, suffered from the unseasonably warm autumn as it said on Tuesday that like-for-like sales fell 4.2 per cent in the first seven weeks of the group’s financial year.
Rob Templeman, chief executive, said: “There has been a bit of volatility from week to week. When it has been warm out there, things like coats and outerwear and jumpers are not selling. When it gets cool then they just start selling.”
He added: “As it has cooled down in the last couple of weeks, sales have responded. Our products are fine. It is more about the consumer mindset [and customers saying] ‘when do I need to buy a coat and gloves and accessories?’.”
In its first full-year results since returning to the market after two and a half years in private equity hands, Debenhams said pre-tax profit in the year to September 2 fell to £62.1m from £87.6m.
Mr Templeman blamed the drop on initial public offering costs of £24m-£25m and a £115m gain in the year earlier period, from the disposal of properties to British Land.
Profit before exceptional items rose 68 per cent to £112.8m.
Turnover rose 6.6 per cent, from £2.06bn to £2.19bn, while like for like turnover was flat, rising 0.5 per cent. Net debt fell from £1.88bn to £1.11bn.
Retailers have been hit by the warm, wet autumn, which is causing customers to hold back on big-ticket purchases such as coats. The predominance of grey among autumn collections has also been blamed for failing to inspire.
However, Mr Templeman said grey was Debenhams’ fourth best selling colour, suggesting concerns about grey not appealing to customers were overstated .
“A lot of people are talking about grey,” he said. “Women don’t wear grey as a total outfit. They wear grey with something else. Combinations of grey and red are selling quite well, [as is] grey and black.
Debenhams returned to the stock market in May, with a market capitalisation at debut of £1.68bn.
A trio of private equity groups led by Texas Pacific of the US won the contested bid for the retailer in 2003 with an offer worth £1.7bn, excluding costs.
A dividend of 2.4p is payable from earnings per share of 7.4p (26.2p).
Debenhams shares were up 1½ pence at 181p in early trading, but still below the IPO price of 195p.
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