Debenhams shares continue to plunge on supplier woes in the run-up to Christmas

Shares in embattled department store chain Debenhams have continued to plunge this morning on reports of supplier troubles in the run-up to Christmas.

A number of high street suppliers have stopped working with the Debenhams after credit insurers reduced protection for suppliers, trade magazine Drapers reported.

Its share price has dropped close to nine per cent this morning following its biggest single day loss in over a decade yesterday, falling 21.4 per cent.

Shares have now fallen more than 40 per cent since Friday.

A spokesperson for Debenhams said: “Many suppliers don't use credit insurance. Those that have used it historically are well aware of the current situation and work with retailers to manage things accordingly.

“Debenhams is well stocked for Christmas.”

Last month the high street retailer reported a £491.5m loss – the biggest in its 240-year history – and unveiled plans to close up to 50 stores as part of a turnaround strategy.

Retail sales for October fell by 0.5 per cent, the Office for National Statistics said today, further dampening the outlook for the UK's high streets – ecomomists had predicted a 0.2 per cent rise.

It was led by a “strong decline” in household goods stores following a strong August and September.

But sales in the three months to October increased by 0.4 per cent compared with the previous three months.

Head of retail at Barclays Corporate Banking, Ian Gilmartin said: “It’s not what hard-pressed retailers need to see at a tricky time for the industry, with household goods drifting back after a strong summer and clothing sales struggling a little as Autumn lines proved difficult to shift during the mild start to October.”