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Debenhams reaffirms its faith in its transformation strategy in the face of investor concern

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Debenhams has seen a turbulent opening to the week: even as it announced its new approach to selling beauty on the high street and online, it was pushed by media reports into reassuring markets on its profitability.

The department store group, which trades from 165 stores and is a Leading retailer in IRUK Top500 research, responded to reports that it had brought in KPMG to advise it on options including a possible CVA by saying that it expected to make pre-tax profits of around £33m in its current financial year. It said was responding to a challenging market through its Debenhams Redesigned strategy – an ongoing transformation plan that aims to put social shopping at the heart of a new-look in-store and online customer experience.

Chief executive Sergio Bucher said: “The market environment remains challenging and underlying trends deteriorated through the summer months. Nevertheless, the product and format improvements we have tested are gaining traction and we are ready to scale up some of our strategic activity ahead of peak. Having put in pace a leaner operational structure and. Strong leadership team, and taken action to strengthen our financial position, we are well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge.”

The reassurance came as Debenhams unveiled the latest part of its strategy that combines social with multichannel shopping.

It has launched what it says is the UK’s first loyalty-based digital social platform. The Debenhams Beauty Club, it says, will put customers front and centre in the conversation on beauty, with conversation boards on skincare, make-up alongside a clubhouse and blog. Regular posters will be rewarded with Beauty Club points. Debenhams is also extending the beauty clubhouse concept into its new in-store beauty halls, set to open in its Watford flagship store and in its Sheffield Meadowhall store later this month. 

Richard Cristofoli, managing director of beauty and marketing at Debenhams, said: “Beauty is a hugely engaging category where customers want to meet, talk and play with the latest products and brands. By creating the UK’s first online beauty community and designing beauty halls f the future, we are creating easily accessible destinations to explore and discover the latest exciting brands and products. We know that customers have high trust of peer to peer recommendations and aim to capitalise on the collective power of beauty conversations to create Europe’s largest beauty community.”

He points to beauty as a “highly social activity”: “there are over 170 million #makeup and 236 million #beauty photos on Instagram, making it one of the most engaging topics on social media. Through launching the Beauty Club Community we aim to off a digital destination that brings together beauty beginners, enthusiasts and experts in a fun, rewarding and safe space to connect and share their passion by asking questions, offering knowledge and giving authentic advice.  Our Beauty Halls of the Future will also offer interactive spaces where customers can learn and share their beauty discoveries as they shop instore.”

Images courtesy of Debenhams

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