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Debenhams reports 40% lift for online sales

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Debenhams today said its online sales grew by 40% during the spring and early summer.

Fourteen per cent of the department store’s total sales were made over the internet in the 16 weeks to June 22, the retailer said in an interim management statement updating the City on its plans to become an international multichannel brand.

Traffic to rose by 21.7% in the 16 weeks, while mobile was the fastest growing channel – visits through mobile rose by 85% in the period. Debenhams also said its online market share was growing quickly across its categories. In fashion, it had 3.7% of the market in the 24 weeks to May 12, according to Kantar Worldpanel figures, while NPD figures showed it had 31.9% of the premium beauty market in the year to April 2013.

Debenhams announced that it would launch next-day delivery to home in September. The move, it said, “will improve customer service and enable us to recover more of our fulfilment and delivery costs.” It also said it had increased efficiencies in its UK online service, reducing costs as a result. Its international online service “continues to make progress from a low base,” it said.

Chief executive Michael Sharp said the retailer had turned in a “robust performance,” growing market share “in a challenging and volatile period.” “I’m particularly pleased that we have maintained strong growth of online sales which were up by 40%,” he said.

He added: “We are also making good progress on the four pillars of our strategy to build a leading, international multichannel brand. As a result at this stage we remain comfortable with the range of market expectations for profit before tax for the year as a whole.”

Online growth, however, was well ahead of total sales. Group sales rose by 1% in the 16 weeks, while like-for-like sales were flat in a “challenging and volatile” market affected by weak consumer demand and poor spring weather. In the year-to-date, the 42 weeks to June 22, sales rose by 2.6% and like-for-likes were up by 2.1%. In the year-to-date online sales grew by 43.9% to represent 13.1% of total sales.

Elsewhere, Debenhams said the transformation of its Oxford Street store into an international flagship store was on schedule and that its store modernisation programme is continuing.

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