Designers boost Debenhams
Department store group Debenhams hailed the popularity of its designer-led strategy today after achieving further growth in sales and profits.
The retailer, which was acquired by a consortium of private equity groups for £1.7bn (€2.5bn) in December 2003, said a 2.7% rise in like-for-like sales in the 13 weeks to February 26 helped it to increase its market share.
Amid signs of tough trading conditions, Debenhams said all its product categories performed well with the Designers at Debenhams driving growth.
It was also helped by initiatives to improve its supply chain, as the company was better able to keep shelves stocked and introduce newer products.
Overall, turnover lifted 5.7% to £594.8m (€870.3m), although this was down on the 8% improvement seen in the previous quarter. Trading profits, which have been boosted by the one-off impact of property deals, rose 79.4% to £95.1m (€139m).
Debenhams chief executive Rob Templeman said: “Our strategy of designer-based product development, space expansion, store investment and supply chain initiatives is delivering strong growth in sales and profit.”
He added: “All of this reinforces the confidence we have in the trading and growth potential of Debenhams as we continue to increase market share.”
The group recently took its number of branches to 116 after acquiring eight stores – at Basildon, Ilford, Portsmouth, Slough, Sutton, Woking, Chatham and Clapham – from the administrators of collapsed chain Allders.
It has also undertaken a programme of “low cost” store refits in order to boost returns from its store portfolio. Industry research recently put the company’s share of the department store sector at 15.8%.
Privately-owned Debenhams, which was acquired by CVC Capital Partners, Texas Pacific Group and Merrill Lynch Global Private Equity, still posts quarterly figures because of the need to keep bondholders informed.
Across the 26 weeks to February 26, Debenhams said like-for-like sales rose 4.2% with trading profits up 63.7% at £152.2m (€222.7m). Pre-tax profits lifted 269.5% to £162.2m (€237.3m), in part because of property transactions.
