Debenhams has announced it will be slashing prices after issuing a profits warning following poor Christmas sales.
Shares in Britain's second-largest department store plunged by as much as 13% on Tuesday after it disclosed profits nearly £30m lower than last year.
In a statement released by Debenhams management, they say that they now "expect the need for additional markdown to clear stock in January and February".
The store said that while online sales had increased they had not done so significantly enough and that the "final surge" in sales they had expected around Christmas had failed to materialise.
It blamed the poor performance on the continuing decline of the high street, the impact of the recession on household incomes and the bad weather.
The retailer is planning to slash prices in January and February Michael Sharp, chief executive of Debenhams, said: "As has been widely commented on in the media, the market was highly promotional in the run up to Christmas and we responded to these conditions to ensure our offer was competitive.
"However, this extremely difficult environment has inevitably had an impact on both our sales and profitability.
"Looking forward, I expect conditions to remain highly competitive as we enter 2014. Everyone in the organisation is focused on improving performance and growing the business, building on the four pillars of our strategy which I remain confident will lead to success over the longer term."
The announcement, which had been due on January 17 but was brought forward because of the results, saw the retailer reveal an £85m profit for the 17 weeks to December 28 – some way off the £114.7m in the same period last year, a 26% drop.
The company's statement showed that online sales had increased by 27% during that time and accounted for 15.6% of total sales, compared to 12.4% for the same period last year.
However, the income from online delivery was, it said, still lower than had been anticipated.
It comes after the high street spending spree dubbed 'Manic Monday' that had been predicted for December 23, failed to materialise because of the strong winds and heavy rains.
Analysts had expected 15 million people to take to stores, spending £2.6m a minute on gifts, food, drink and decorations.
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