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Debenhams reports 46% first-half boost to ecommerce sales

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Photo: Debenhams

Debenhams today reported strong multichannel growth, with online sales up by 46% to £194.4m in the first half of its year. Some 12.7% of all the department store group’s sales now take place over the internet.

The retailer is now aiming to more than triple that total, targeting turnover of £600m in the medium-term. Today it said that mobile continued to be its fastest-growing channel, with sales up by 265%, compared to the same time last year.

News of the ecommerce boost came as the retailer reported a 3.6% rise in group sales in the 26 weeks to March 2, to £1.3bn. Group like-for-like sales, which strip out the effect of store openings and closures, rose by 3.1%. UK sales rose by 3.9% to £1.1bn and international sales by 2% to £206m. However, pre-tax profits dipped by 5.4% to £120.3m, from £127.1m at the same time last year.

Michael Sharp , chief executive of Debenhams, put the profit shortfall down to January weather. “We made progress during the first half,” he said, “although snow in late January meant we did not achieve the profit outcome we had expected. Like-for-like sales grew for the fourth consecutive half and we saw positive market share momentum in key categories. Our multichannel activities continued to grow, with online sales increasing three times faster than the market.”

He said the retailer remained “committed” to its strategy, aimed at building “a leading international, multichannel brand.” “We are sure that this strategy is right for Debenhams and of the benefits it brings to the business and its shareholders,” said Sharp.

The four pillars of Debenhams’ strategy include a focus on UK retail, developing a “compelling customer proposition,” increasing availability and choice through multichannel, and international expansion of the brand.

On the multichannel front, it said it was “working to improve the efficiency of our online service.” Key to this, it said, was the improvement of its fulfillment delivery operations. Debenhams now handles most fulfillment in-house, and aims to offer next-day delivery in time for Christmas 2013.

The company now has 155 stores in the UK, with nine modernisations completed in the first half of the year. It said today that the transformation of its Oxford Street store into an international flagship one was on plan, while four stores were expected to open each year from 2014 to 2017.

There are 79 international Debenhams stores, 62 franchised and 17 owned. The company aims to have 150 in total in five years’ time.

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