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Debenhams reports 12.7% growth in first-half multichannel sales following move to widen delivery choice and cut discounts

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Debenhams today said its multichannel business continued to grow over six months in which it it improved delivery and ran fewer promotional offers.

Online sales of £271.8m were 12.7% up in the six months to February 28 compared to the previous year. Ecommerce now accounts for 17% of the department store group’s gross transaction value of £1.6bn, which was itself up by 2.3% over the half-year. Some 42% of its online sales took place over mobile devices in the six months.

Group pre-tax profits of £88.9m were 4.3% up on last time, while like-for-like sales were 1.3% ahead.

Multichannel was at the heart of strategy, with online delivery options broadened from October to include next-day click and collect, as well as 10pm cut-off for next-day home delivery. Click and collect grew by 22.1% in the first half – as customers voted with their feet for more convenient services – and next-day services accounted for 49% of orders in the seven days before Christmas. In the four weeks to January 10, these new delivery options helped to grow online sales by 28.9%. The new services, said the company, operated well over the peak Black Friday period, with the new premium delivery options helping to improve online profitability (EBITDA) by 7.1%.

Michael Sharp , Debenhams chief executive, said he was pleased with progress against the business’ strategic priorities. “We have improved our multichannel offer and successfully introduced the premium delivery options that we promised for the important peak period, which met with a positive response from our customers.”

He said a continued move to refocus the company’s promotional strategy, which has seen discounts offered on 39 fewer days over the last year, had brought “a strong [9%] increase in full price sales, an improvement in value perception, and enabled us to end the half with an improved stock position.”

Sharp said: “Looking forward, our customers tell us they are feeling a little more optimistic about the economic outlook, but they remain cautious. Accordingly we are continuing to plan prudently in the near term, while remaining focused on our strategic priorities, and are continuing to invest to ensure that our business is well-positioned to drive sustainable growth in the longer term.”

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