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Debenhams raises online targets as ecommerce grows by nearly 40%

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Debenhams today raised its target for online sales, as it reported such sales had risen by almost 40% in its latest financial year.

The department store and multichannel retailer said that while total sales at the group had risen by 2.6% in the year to September 1, online sales were up by 39.8%, rising to £250.6m during the year, and ahead of market growth put at 13% by Kantar. In response it has raised its medium-term online target from £500m to £600m.

Group revenue rose by 2.5% to £2.2bn, while like-for-like sales were up by 2.3%. Pre-tax profits rose by 4.2% to £158.3m, from £151.9m last time.

Multichannel innovations during the year included the launch of the Endless Aisle store-fulfillment system, and free wi-fi in all stores. The latter helped to contribute to a 200% rise in visits from mobile devices during the year.

International was another key growth area, and the company said it had launched into two new territories and opened seven new overseas stores during the year. Debenhams now delivers online orders to 66 countries outside the UK, up from seven at the same time last year. Another 30 countries are to follow. It also now has dedicated online sites in Germany and Ireland, with more to follow.

Michael Sharp, chief executive of Debenhams, said: “We have made good progress in 2012, achieving higher sales and earnings growth despite a very difficult market. I believe the strong sales momentum we achieved in the second half of 2012 is clear evidence that our strategy to build a leading international, multi-channel brand is working and this has prompted us to be more ambitious with our medium-term targets for the growth of our online and international operations.

“Looking forward, we believe that customers are acclimatised to the new economic reality. Whilst we don’t anticipate a significant change in the economic environment in 2013, we expect to make further progress during the year. We will always manage cash, costs, stocks and margins closely but we are committed to continue prudent investment in key areas to deliver long-term sustainable growth as well as further returns of capital to drive shareholder value.”

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