Apr 19, 2018
Debenhams: little credit is due
Funding the new plan from profits is good for the company's credit profile. Net debt of £248m is up 14 per cent on the same point last year. Debenhams has a revolving credit facility of up to £320m. All told, the retailer's debt is equal to 2 times earnings before adjustments. If lengthy lease obligations are added the debt looks more onerous. If the company can close some stores and stop discounting so much stock, profits should stabilise before the debt is due.
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