Debenhams shares rebound as wider retail sector suffers in October

Shares in embattled department store chain Debenhams have rebounded this afternoon after suffering its biggest single day loss in a decade yesterday.

Its share price was up 18 per cent to 6.2p having fallen to a low of 4.6p earlier in the day – a 40 per cent drop since Friday.

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

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.”