LONDON, Dec 31 (Reuters) - Debenhams, Britain's second-largest department store retailer by sales, said trading in the key run up to Christmas had been disappointing, meaning it would have to cut prices and take a hit on profits.
The group said on Tuesday it had not seen the expected surge in last minute sales and that its heavy discounts would knock gross margin lower in the first half by between 80 and 100 basis points. Its shares were down 10 percent at 1035 GMT.
It said it now expects profit before tax for the first half of its fiscal year to be in the region of 85 million pounds ($140.47 million), down 26 percent from last year. Analysts had expected first half pretax profit of 112 million pounds, according to Thomson Reuters data. ($1 = 0.6051 British pounds)