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Debenhams reports online growth but offline fall in sales

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More shoppers bought online from Debenhams in the last year, but fewer people visited its department stores as it saw the evidence of a “structural change in shopping habits into online”, the department store chain said today.

Online sales rose to £366.3m in value during the year, a jump of 46.2% compared to the previous year, and accounted for 13.2% of group sales in the year to August 31, up from 9.3% last time. Some 25% of its online sales were made over mobile devices. At the same time the number of visitors to increased by 36% to 241m, with mobile visits up by more than 200%. In the medium-term the company aims to boost online sales to £600m.

Total revenue grew by 2.3%, to £2.28bn. UK sales rose by 1.9% to £1.89bn, while international sales, mostly online, grew by 4.5% to £386.3m. But pre-tax profits fell by 2.7% to £154.0m.

Like-for-like sales grew by 2% thanks to 4.1% growth in like-for-like online sales. But the like-for-like contribution from UK stores fell by 2.7%, while new space contributed growth of 0.4%.

Michael Sharp , chief executive of Debenhams, said: “I am pleased with our performance in 2013 given the very difficult conditions. We gained market share in key categories, demonstrating the competitiveness of our product offer. We continue to deliver growth and additional customer benefits through our strong multichannel capabilities. At the same time, we are working hard to ensure our UK stores adapt to the challenge of their changing role in a multi-channel world.

“Looking ahead, we remain confident in our strategy and are excited about the upcoming launch of our global flagship store on Oxford Street which coincides with the celebration of Debenhams’ 200th anniversary.

“More widely, whilst consumer confidence may be showing signs of improvement, we expect that household incomes will remain under pressure from inflation growing ahead of wages. With this in mind, we remain cautious about the strength and pace of any consumer recovery in 2014 and expect the marketplace to remain highly competitive.”

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