Debenhams accelerates its strategy to get in shape sooner
Debenhams chief executive Sergio Bucher said its Christmas trading figures showed it needed to act even more quickly to get the department store group in shape to face a fast-changing New Year retail environment.
A combination of digital sales and “tactical” discounting provided stronger sales for Debenhams ahead of Christmas, although sales fell in the longer-term. In its six week Christmas period, like-for-like sales grew by 1.2% and online sales by 15.1%. But in the 17 weeks to December 30, like-for-like sales fell by 1.3% - and by 2.6% in the UK - while digital sales rose by 9.9%.
The retailer said it had responded to a more promotion-driven market during the period, in order to remain competitive.
Digital sales were boosted by strong growth in demand via smartphones, with sales via the device up by 36% year-on-year. Conversion was boosted by around 20% thanks to app-driven improvements to the mobile site. Debenhams expects mobile and digital performance to improve through the year as it further upgrades its mobile platform in partnership with Mobify.
The retailer, a Leading trader in IRUK Top500 research, also said that it had seen “encouraging” results from its Debenhams Redesigned strategy. They include “promising” signs from store format trials in Stevenage and Wolverhampton, and its first “right-sized” store in Uxbridge.
Meanwhile, it aims to increase cost savings to £20m a year, while reorganising its stores and support centre and plans to accelerate “some aspects of our strategic plan to deliver a long-term sustainable future for Debenhams and continue to review activities that could be more rapidly and profitably delivered through partnerships.”
Chief executive Sergio Bucher said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance. Nevertheless, we are seeing positive early signs from the changes we have made as part of our Debenhams Redesigned strategy. The market dynamics we have seen have reinforced our view that we need to move even faster to implement the cultural and organisational changes needed to ensure Debenhams is in the best possible shape for today’s fast-changing retail environment.”