Shares in Debenhams fell more than 20% on Thursday after the department store operator issued a profit warning following a "highly competitive and volatile" Christmas trading period.
The company said it could not rule out job cuts after like for like sales in the 17 weeks to 30 December fell by 2.6% in its core UK market.
As a result, the company said it now expected full-year, pre-tax profit in a range between £55m-£65m, substanitally below consensus forecasts of about £80m.
Debenhams said it had taken promotional action that resulted in a stronger than expected six-week period over Christmas. It said: "Against tough comparatives, like for like sales rose 1.2% in constant currency and digital sales grew 15.1%".
It added, however, that the first week of post-Christmas sales was below expectations despite further markdown investment.
Debenhams was the second large British retailer to offer an insight into Christmas trading conditions. In a trading update on Wednesday, fashion retailer Next defied predictions of weaker festive trading to post sales growth - although profits were down on the previous year.
Chief executive of Debenhams, Sergio Bucher (left), said: "The market has been challenging and particularly promotional in some of our key seasonal categories . . . which has impacted out profit performance.
"The market dynamics we have seen have reinforced out 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."
Having fallen more than 20% in early trade, shares in Debenhams were down 18.85% at 28.72p in mid-morning trade on the London Stock Exchange.