Debenhams this week said its strategy to connect stores and digital through customer engagement was paying off – despite falling profits and sales in its latest half-year.
The department store, a Leading retailer in IRUK Top500 research, has focused on social shopping that links both stores and digital in a Debenhams Redesigned strategy, announced last April, that aims to change the business to reflect the way that customers’ shopping habits are changing. But today it reported revenue of £1.3bn across the group in the 26 weeks to March 3. That’s 2.4% down on the same time last year. UK sales were 3.7% down at £1.06bn, while international sales of £253.3m were 3.5% ahead. Pre-tax profits before one-off costs came in at £42.2m, down by 51.9% on last time, but at the bottom line after exceptional items totalling £28.7m, pre-tax profits of £13.5m were down by 84.6%. The final week of the first half was disrupted by snowfalls dubbed the Beast from the East, which saw almost 100 stores close during its ‘new season spectacular’ promotions.
Debenhams said, nonetheless, that digital was growing ahead of the market, thanks to improvements to its website and mobile platform. At the same time, it had seen “encouraging” results from trials of new store formats, now being rolled out to around 35% of its UK stores.
Chief executive Sergio Bucher said Debenhams was moving faster than ever to respond to a “profound change” in the UK retail market by delivering a Debenhams Redesigned strategy.
“Digital growth continues to outpace the market,” he said, adding: “We are holding share in a difficult fashion market and in other categories such as furniture exciting new partnerships have the potential to transform our offer. We approach the remainder of the year mindful of the very challenging market conditions, but with confidence that we have a strong team and the right plan to navigate them and return Debenhams to profitable growth.”
Here’s what the retailer said about its multichannel strategy.
Mobile and crosschannel
Investment focused primarily on mobile has helped to drive “above market digital sales growth” of 9.7% along with improved conversion rates, the retailer said. Digital sales accounted for 21% of the UK business in the first half of the year. Sales of beauty products were particularly high, growing at 16% year-on-year, while digital sales also grew faster over the Christmas peak trading period.
Debenhams’ mobile site, it said, is now its fastest growing store, with more than 150m visits a year and revenues now approaching £250m. Orders placed via a smartphone grew by 35% in the first half and accounted for 33%…