Takeover Panel
14 October 2003

2003/23

OFFERS BY

LARAGROVE LIMITED ('LARAGROVE')

AND

BARONESS RETAIL LIMITED ('BARONESS')

FOR

DEBENHAMS PLC ('DEBENHAMS')




On 4 August, Laragrove posted an offer to Debenhams' shareholders. On 29 September, Baroness posted an offer to
Debenhams' shareholders, such offer to be implemented by way of a scheme of arrangement. Neither offer has yet been
declared final and either offer may therefore be increased or otherwise revised.

In order to provide an orderly framework for resolution of the competing offers and in accordance with Rule 32.5, the
Panel Executive has ruled, following discussions with the parties, that except with the consent of the Panel
Executive:


if either Laragrove or Baroness wishes to revise or increase its offer (other than in
accordance with the following procedure) after 5.00 p.m. on Thursday 30 October then that
bidder must lodge any increased offer with the Panel Executive by 4.00 p.m. on Friday 31
October (the 'Auction Start Date'), such increased offer to be announced at approximately 5.00
p.m. that day;


if the bidder with the lower offer at 5.00 p.m. on Thursday 30 October, or if both bidders,
announce(s) an increased offer by approximately 5.00 p.m. on the Auction Start Date then an
open auction procedure shall begin and the bidder with the lower offer following such
announcement(s) shall have until 4.00 p.m. on Saturday 1 November to lodge an increased offer
with the Panel Executive, such increased offer to be announced at approximately 5.00 p.m. that
day;


if the bidder with the lower offer after the announcement(s) at approximately 5.00 p.m. on the
Auction Start Date, or if both bidders, announce(s) an increased offer on Saturday 1 November,
the bidder which then has the lower offer outstanding shall have until 4.00 p.m. on Sunday 2
November to lodge an increased offer with the Panel Executive, such increased offer to be
announced at approximately 5.00 p.m. that day. If the bidder with the lower offer after the
announcement(s) at approximately 5.00 p.m. on Saturday 1 November, or if both bidders,
announce(s) an increased offer on Sunday 2 November, the lower bidder shall have until 4.00
p.m. on Monday 3 November to lodge an increased offer with the Panel Executive, such increased
offer to be announced at approximately 5.00 p.m. that day;


if such an increased offer is announced on Monday 3 November, then the open auction procedure
shall cease to operate. Both bidders shall be invited to submit sealed bids to the Panel
Executive by 1.00 p.m. on Tuesday 4 November specifying a fixed maximum price that each bidder
is prepared to pay. Formula offers will not be permitted. An announcement by the bidder
with the highest offer will, unless otherwise agreed by the Panel Executive, be released by
5.00 p.m. that day;


if, during the open auction, the bidder with the lower offer does not lodge an offer with the
Panel Executive by 4.00 p.m. the next day or if a party is the under-bidder in the sealed bid
process (as appropriate) then that bidder will not be able to amend its offer thereafter;


a further announcement will be made regarding the offer timetable once the above process has
been completed; and


the Panel Executive reserves the discretion to amend the above procedure as appropriate.



Each of the parties has accepted this ruling.

14 October 2003

Refinancing Announcement

REFINANCING OF BORROWING FACILITIES

Debenhams plc, the leading international, multi-channel brand, has announced that it has refinanced its borrowing facilities.

Debenhams has priced its offering of £225 million Senior Notes (the "Notes") due 2021 at 5.25%. The offering was upsized from the £200 million aggregate principal amount announced on 20 June 2014. The offering is expected to close on 2 July 2014 upon the satisfaction or waiver of customary closing conditions. The proceeds from the issue and sale of the Notes, when completed, will be used to prepay existing credit facilities of Debenhams and to pay the fees and expenses related to the offering and sale of the Notes. The Notes will be guaranteed on a senior basis by certain of Debenhams' UK subsidiaries.

At completion, Debenhams will contemporaneously extend its existing bank financing arrangements to October 2018 in the form of a £425 million revolving credit facility.

The refinancing of borrowing facilities in this way will lead to an interest charge for the financial year to August 2015 of £22-24 million, in line with guidance provided on 20 June.

Michael Sharp, Chief Executive of Debenhams plc, said:

"This refinancing will allow us to reduce our reliance on traditional bank funding and fulfil our desire to diversify our sources of funding. In addition, we expect to achieve a material saving in interest costs over the life of the Notes. The Notes offering was well-subscribed and we believe the level of demand reflects the strength of investor confidence in our business and our strategy to build a leading international, multi-channel brand."

Barclays, Lloyds Bank and The Royal Bank of Scotland acted as Joint Global Co-ordinators and Joint Bookrunners. Lazard provided independent advice to Debenhams.

I'm confused - why would Banks accept lower interest - unless they feared the business would fold and they'd get Zippo?
The cost of this loan is likely to affect profitability at a time when they've spent a lot of money on a prestigious HQ and need to continue revamp Stores to encourage Sales ( er, sorry that's Customers).
At 59p today and nearer to £1 Sept. last year it looks like cutting the Div makes cash-flow sense - Oh deary. . . . and I don't see any "retail" regaining the upper hand too soon.
( But there may be a TO, which is a different game altogether; should someone else think they know better. )

Final Results

Financial headlines
· Gross transaction value up 1.7% to £2,823.9m
· Group like-for-like sales up 1.0%
· Group gross margin down 60bps: H1 down 100bps, H2 up 10bps
· Operating profit down 17.2%: H1 down 22.9%, H2 up 2.9%
· Profit before tax in line with market expectations
o Underlying profit before tax* down 20.6% at £110.3m
o Reported profit before tax down 23.9% at £105.8m
· Underlying EPS* down 19.6% to 7.4p, reported EPS down 22.8% to 7.1p
· Final dividend of 2.4p per share; full year dividend of 3.4p per share maintained
· Net debt improved by £10.5m to £361.5m
· Borrowing facilities refinanced including issue of £225.0m 5.25% seven year senior notes
*Before non-recurring finance cost of £4.5m (2013: nil)

Operational headlines
· Good progress made in second half against strategic priorities to deliver long-term sustainable growth and to address first half operational issues
o Refocusing of promotional strategy resulted in 10.6% increase in own brand full price sell-through in second half
o New online delivery options now fully available including next day click & collect and 10pm cut-off for next day delivery to home
o Encouraging early signs from UK space optimisation trials including Sports Direct, Costa, Monsoon and Mothercare
o More conservative sales targets and tighter buying levels resulted in 5.3% reduction in like-for-like closing stock
· Multi-channel continued to grow with online sales up 17.6%, representing 15.3% of Group sales, online EBITDA increased 20.5%
· Oxford Street transformation completed on plan and is trading in line with expectations
· Strong debut seasons from Designers at Debenhams Patrick Grant, Stephen Jones and Todd Lynn
· Good performance by Magasin du Nord and international franchise stores

StockMarketWire.com
Sports Direct International has sold its 4.6% stake in Debenhams - 56,381,164 ordinary shares - and entered into a put option agreement over 74,185,742 ordinary shares of Debenhams, 6.1% of the issued share capital of Debenhams).

To the extent that the market price of Debenhams' ordinary shares is less than an agreed exercise price on expiry of the put option, Sports Direct has the right to elect whether to settle the put option by acquiring ordinary shares in Debenhams at the exercise price or by paying the cash settlement value of the put option.

Under the terms of the put option, the company will receive a premium, which is payable on expiry of the put option. To the extent that the market price of Debenhams' ordinary shares is greater than the exercise price on expiry of the put option, Sports Direct will receive the premium and will have no further obligations.

Sports Direct is required to transfer cash collateral to cover its obligations under the put option. The amount of collateral required during the life of the put option can increase or decrease by reference to the underlying market price of Debenhams' ordinary shares. After taking into account the premium it will receive, the group's maximum exposure under the Put Option is limited to approximately £46m.

Stockwatch: "Look to buy" this share if wages rise

Interim Management Statement

Debenhams plc today announces its trading update for the 19 weeks to 10 January 2015.

Highlights
· Strongperformance in the key Christmas period: 4 weeks to 10 January
o LFL sales up 4.9%
o Online sales up 28.9%
· Record Group sales in the 7 days prior to Christmas
· Good performance on Black Friday within an existing Debenhams promotional event with sales in the week up 10.3%. Online orders on the day up 125%
· Good progress on the five priorities laid out at the Interims in April 2014
o 10 fewer days on promotion
o 12.1% increase in own bought full price sell-through
· Stock levels under control with terminal stock forecast at historically low levels

Nearly 1-year and no comments..... Oh dear.

Nov. 2015.
Directors buying shares, so presumably there's no News about to be made Public. However, I see that some Dirs are being given shares "free" - I can't say I like that unless it's in lieu of Salary - Since most Execs are paid v.well, without getting freebies.
DEB is still a messy store, but I read in IC their overseas operations ( e.g. JV in Saudi ....DYOR), is ticking up nicely..... so, someone likes what they want to sell.
EDIT(7July2916)- Woops! sp 52p and some Dir Buys . . . but with BrExit, won't their profits falter more? Customers may be feeling pinched, so put-off buying ( At higher prices, soon) . . . . so maybe we could see 40p . . . . by Sept16.... Oh Dear.
EDIT(12Dec2016)- It dipped to 54p ( DYOR ).
. . . . . . . . . . . Let's hope Xmas is good for DEB - sp 57p.
EDIT (12Jan2017)_ missing AGM ( s. Rail strikes, etc. )- but I see no Turnaround situation - sp abt 57p not exactly exciting.

CHRISTMAS TRADING UPDATE

"Beauty and Gifts support good Christmas performance"

Debenhams plc, the leading international, multi-channel brand, today announces its trading update for the 18 weeks to 7th January 2017.

Financial Highlights

· Group gross transaction value +3.7%; Group like-for-like sales as reported +3.5%
· Group like-for-like sales in constant currency +0.5%, including UK LFL +1.0%
· Online sales +13.9%, with two year growth of over 25%
· Gross margin within FY17 guidance of (25bps) to +25bps, sales mix continues to be dilutive
· Good performance in the 7 week Christmas period to 7th January:
- LFL sales +5.0%, +1.7% in constant currency
- Online sales +17.0%

Operational Highlights

· We have made further progress in growing non-clothing categories in line with our strategy. Beauty and Gift sales grew strongly to take the non-clothing sales mix in this period to 57%
· We have maintained market share in a competitive clothing market whilst continuing to reduce the number of clothing options as well as the level of discounts, with stocks down 7% year on year
· We have continued to reduce the overall participation of promotional activity, with a sixth season of reduced markdown and a 2% improvement in full price sell-through in the period. We again saw a successful Black Friday event with strong year on year growth both online and in our stores
· Momentum has strengthened in multi-channel sales growth, driven by smartphone demand up 68%, with an increased uptake in premium delivery services as our customers respond to the improvements we have introduced
· As planned, we have completed 75% of our current store space optimisation programme, and rolled out a further nine food service offers, launching two new partnerships, with James Martin Kitchen and Franco Manca, in the period
· Internationally, Magasin du Nord in Denmark saw a tougher trading environment whilst the Republic of Ireland has maintained steady performance after successfully exiting Examinership.

Sergio Bucher, Chief Executive of Debenhams, said:

"I'm pleased with the performance we have achieved in the key trading weeks of Black Friday and over the Christmas peak, given the challenges in the broader environment and the strong performance last year. The resilience of Debenhams' differentiated offer is beginning to show through, with the growth we have driven in beauty and gifting. It's encouraging to see that the service improvements we have made helped us to deliver strong multi-channel sales growth.

"I witnessed the hard work of the executive team and all our colleagues, who made sure that we were able to deliver a fantastic service for our customers over such a busy period, complementing the great choice of products and brands that we have to offer. There is a lot more we can do to build from this base and I'm looking forward to providing an update on our plans for Debenhams alongside our interim results in April."


more....

Cantor Fitzgerald Hold 56.48 55.00 55.00 Reiterates

Haitong Securities Buy 56.48 70.00 70.00 Reiterates

Liberum Capital Hold 56.48 58.00 58.00 Reiterates

Can't MoneyAM change the title of this discussion... as the Headline News is very much OUT-OF-DATE.?
Currently DEB is 44p - not looking too good.

Loaded with too much debt.

My problem with DEB is that I don't know what they stand for. Take M&S - quality underwear and ladies fashion that isn't fashionable...and//Food that rich-er folks buy because it tastes better..... probably along with the Restaurant ( even seen the price of a current-bun!).
DEB isn't AFIK a fashion hot-spot... indeed they appear to have a permanent Discount/Sale on - Whilst I'm no fashion-buyer I really don't know why I'd go to DEB - it appears to me to be overpriced "middling" - it's neither Long-Lasting ( as M&S clothing ), nor is it Trendy . . . . but I guess that DEBT is the unspoken reason for the sp slide. I bought a few at 75p (was it?), then it hovered and has only slipped badly since the new Chief started to flex muscles. Naturally any Root/Branch cuts will take time to benefit.... meanwhile their DEBT doesn't appear to have subsided..... Still there's hope...that it doesn't follow BHS . . . . and probably won't as I suspect the Folks running it are all on the level.... doing their best to turn the ship before the rocks break through the hull.
EDIT (24Jan2018)- Funny, I came across IC article for 2009 - and DEB was a Sell at 34p.....not much change there, then! - - - Today sp=29p Oh Dear, Oh Dear.

Debenhams warns on profit after price cuts fail to lure shoppers

Liberum Capital Sell 28.43 40.00 25.00 Reiterates

Liberum view: The company has not made any comment, at this stage, in relation to the press reports, although if the rumours are true it would not come as a great surprise to us. On the negative, it would suggest Debenhams' turnaround strategy to date has not been enough to improve its financial performance to help alleviate the ongoing pressures that have led to three profits warnings and a greater than 50% cut to consensus over the past 9 months. The group continues to rank poorly when looking at a variety of quality metrics – three year forecast EPS CAGR -25%, fixed charge cover (EBIT basis) 1.2x, operational gearing of over 20x and net debt:EBITDA 2.0x. If a positive were to be taken from this newsflow, we believe it is that management is now potentially looking at much more drastic action, which could bring about a more appropriately sized store estate and cost base quicker. This is exactly what we think is required for any successful turnaround to set the business on a path to achieve long-term sustainable profit growth.

IC this week suggested keeping away... pity as I'm already "in" +can't do much at 9p
Fact is Management has "watched the house burn down" (IMHO) . . . they need to be replaced at the very least AND maybe shift to on-line, with short-term "offers" to minimise stock-holding and rapid turnover their cash. But WhatdoIknow?
I think the warning was writ-large when they refurbished their HQ. + Exec discussed their carpets, desks etc. at length......forgetting their business was going to the skip!
EDIT (25Oct2018)-Oh deary, 50+ Store closures and no Divi! sp 9p.

StockMarketWire.com
Beleaguered UK department store group Debenhams on Thursday scrapped its dividend after reporting a full-year loss and said it would close up to 50 of its stores as it continued to grapple with a gloomy retail backdrop.

Faced with tough decisions on stores vulnerable to weaker financial performance, Debenhams said it would close up to 50 stores over 3-to-5 years, compared with the 10 previously identified, as part of a plan to cut costs to achieve profitable growth.

For the full-year to 1 September, the company reported a pre-tax loss of £491.5m, compared with a profit of £59m, like-for-like sales declined 2.3% and earnings (Ebitda) fell 27.5% to £157.3m, below earnings guidance of between £160m and £165m.

The swing to a loss was blamed on exceptional charges relating to the company's redesigned strategy and non-cash exceptional write-downs of £512.4m.

Underlying profit before tax fell 65.1% to £33.2m, below profit guidance of £35m-£40m.

The weak results were exacerbated by a 140 basis points decline in gross margin as the company slashed costs to keep up with competition.

'It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging,' said Sergio Bucher, CEO.

'Debenhams remains a strong and trusted brand with 19m customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market.'

5p possible here.

DEB sp 6p.......I note that several large-retailers are closing stores. Yet I wonder how they can select One store against others - doesn't local events affect buying on the high-street? . If these are large ( Like a rival opening opposite!) - that's understandable, but unlikely to happen in these times.
M&S is another not-dissimilar large store with falling customers. Is this only because of on-line? - This is something we hear often in the News and by Execs trying to hold their jobs! . . . Yet many product need to be seen, felt and compared in the raw as it were.... something you don't need to do with many products which are "Me-too" types and (should) need no comparison, other than availability/price/etc.
DEB has been a real disaster starting with their refurbished HQ near Euston (DYOR) a few years ago when I noted that it's difficult to think of DEB for any particular strength. other than Reductions! . . . [ M&S was "food"]....
Yet executives all-round are "hoping for something to happen" rather than doing a stint in the stores as Recruits.... giving them valuable customer-insight. I guess at current sp we are just waiting for Administrators . . . .
Anyone...?
EDIT(20Dec2018)-sp abt 3p9 now..... are Execs asleep? (- er, "Still"? )

CHRISTMAS TRADING UPDATE



Debenhams plc today announces its trading update for the 6 weeks and the 18 weeks to 5 January 2019.

Financial Summary

· Against a challenging market backdrop, the Group is currently on track to deliver current year profits in line with market expectations[1], supported by further identified cost savings.

· Group gross transaction value for 6 weeks to 5 January declined (3.8)% with group like-for-like sales down (3.4)%. In this period, the UK declined by (3.6)%, with weak store footfall offset by growth in digital.

· For the 18 weeks, group gross transaction value declined (5.6)%, with LFL down (5.7)%. The UK was down (6.2)% with International down (3.5)%. Digital sales have grown by 4.6% across the period.

· The UK trading environment has continued to be volatile, as expected, with clear evidence that our customers have been seeking out promotions. As a result we reinstated some tactical promotional activity in order to be competitive and manage inventory tightly, which will result in some gross margin erosion in the first half.

· We continue to generate cash, with net debt as at 5 January of £286m, within the context of our total committed debt facilities of £520m.

· In light of the requirement to refinance existing bank facilities within the next 12 months, constructive discussions have commenced with lenders, and the group has put on hold any further asset disposals until the outcome of those discussions is known. This process includes options to bring new sources of funding into the business to ensure the appropriate capital structure. We will update on progress with these plans shortly.

Strategic priority update

· After a slow start to the season, group digital sales rose 6.0% in the 6 week period over peak against a strong comparative performance, delivering two year growth of over 20%. This was supported by improved mobile conversion and customer experience.

· New Beauty strategy drove more choice and digital innovation supporting growth in market share in skincare[2] to mitigate decline in premium make-up market.

· Revitalised product has driven improved market share in womenswear[3]; and differentiated gift offer delivered an improved margin performance over peak, with food sales also delivering overall growth of 2% in the 18 weeks.

· Nine stores trading in new design format have outperformed the core chain, with the strongest LFL uplift being seen at Stevenage.

· Previously announced cost savings of an annualised £50m, rising to at least £80m taking into account additional opportunities identified.