In 2006, Debenhams was floated on the stock market, loaded up with £1.9 billion of debt. That Christmas, sales flopped and by January 2007, the business was in financial trouble. And then came the worst trading and financial conditions for 80 years. Only in July 2010 did Debenhams manage to achieve a refinancing package to secure its future (and cut its interest bills). It is no surprise, then, that between 2006 and 2010 the management of Debenhams adopted survival as its key business objective.
The objective of survival usually means attempting to recover from a loss-making position to move towards breakeven output. It usually has to be achieved within a short timeframe, because the loss-making is draining the business of its cash, making a liquidity crisis ever more likely. Therefore survival often requires focused, short-term measures such as:
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