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Online sales boost Debenhams revenues and profits

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Debenhams today reported online sales up by more than a third after six months in which it said its multichannel business grew strongly.

The department store chain said ecommerce sales were up by 34.7% to £124.3m in the six months to March 3, helping to lift like-for-like sales up by 1.4%. Total group revenue was up by 1.3% at £1.24bn and pre-tax profits up 1.4% at £127.1m.

“Our target,” said the financial statement, “is to grow online sales to £500m over the medium-term.” Of that total, it said, some 20% would come through international online delivery, and to that end the company increased the number of countries it delivered to from seven to 40 during the first-half, and by the end of the summer it will rise to 67. A German language and currency website is to launch next month in Germany and will be followed by more foreign language sites.

Innovations during the first half included the introduction of kiosks across its stores, which delivered “encouraging” levels of sales over Christmas, and an ‘endless aisle’ approach that allows customers to order from stock held in its stores as well as its fulfillment centres. “We estimate,” said Debenhams, “that some £10m of potentially lost sales were captured during the period.” It also said that 20% of online sales were now generated via mobile devices.

Chief executive Michael Sharp said: “I set out the four pillars of our strategy to create a leading international, multichannel brand in October last year. I am encouraged by the strong execution over the last six months and am confident of the long-term success of this strategy and the benefits it will bring to our business and our shareholders. We are also pleased to be announcing today the commencement of a long-term share buyback programme.”

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