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Debenhams and French Connection report online growth

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Debenhams today reported full-year online sales up by 46.2%, helping to lift overall sales by 2.5% in the full year.

The department store said in a trading statement issued ahead of its closed period that its strategy to build a leading international multichannel brand had fuelled sales growth in the year to August 31. Like-for-like sales were up by 2%.

It also said its ecommerce growth was ahead of the market, which grew by 14.4% over the same period of time. Debenhams’ online market share increased by 50 basis points to 3.7%, according to Kantar Worldpanel Fashion figures for the 24 weeks to August 4.

Mobile sales also grew quickly, with visits up by 72% and revenue up by 128%, compared to the previous year.

Ecommerce also grew overseas, with international online sales growing quickly from a small base, the company said. It also said that pre-tax profits for the year would be in line with market expectations.

Elsewhere, the company said its modernisation programme was progressing, with 12 new stores finished during the year. Those modernised in 2012 and the first half of 2013 were performing well.

Chief executive Michael Sharp said: “We have succeeded in growing both like-for-like sales and market share in a competitive market where consumers’ disposable income remains under pressure. I am particularly pleased with the growth of our online business.

“While the return to more seasonal weather conditions over the summer has been helpful, the main factor behind this performance has been the relentless focus of everyone at Debenhams on implementing the four pillars of our strategy to create a leading international, multichannel brand.”

The update came a day after French Connection said its online sales had grown “strongly” in the first half of its financial year. However, sales across the business fell by 6.4% to £89.9m in the six months to July 31, while group pre-tax losses narrowed to £6.1m from £6.3m at the same time last year.

The women’s fashion retailer said it had relaunched its website with improved image sizes, functionality and styling, while its introduction of click and collect and returns to store had “created a seamless network for customers, making it easier for them to interact with the business.”

French Connection said it was going through a transformation plan led headed by a team now in place for almost a year. Four UK or European stores have closed during the half-year, with another three planned for closure by the end of the year. Overheads have also been cut while the company has aimed to steer away from discounting.

All of this had led, said chairman and chief executive Stephen Marks, “to improved margins, ranges and retail disciplines across our UK business.” He said that “the changes we have made are starting to resonate with our customers.”

“Although it is early days in our turnaround, the underlying strength of the business and the significant global awareness of the brand, coupled with the changes we are making provide the foundations for continued improvement and give me confidence for the future,” said Marks.

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