Department store chain Debenhams has seen its shares drop by 20 per cent following a disappointing Christmas sales performance.

Debenhams stated that annual profits would be lower than expected – likely to be in the range of £55 million to £65 million – as UK like-for-like sales dropped 2.6 per cent in the 17 weeks to 30 December 2017.

Tactical promotions and discounting helped trading improve group sales by 1.2 per cent on a like-for-like basis over the six-week Christmas period. Digital sales were up 9.9 per cent for the department store chain – marking two year growth of 22 per cent.

Sergio Bucher, Chief Executive of Debenhams, said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance.

“The market dynamics we have seen have reinforced our view that we need to move even faster to implement the cultural and organisational changes needed to ensure Debenhams is in the best possible shape for today’s fast-changing retail environment.”

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