Tough Trading Conditions Hit Sales At Debenhams

Like-for-like sales at Debenhams edged down 0.2% in its third quarter 11 June, impacted by the tough trading conditions on the High Street. The result is a slowdown from growth of 1.1% seen in its first half and means that for the 41 weeks of its financial year so far, like-for-like sales are up only 0.7%.

Group gross transaction value in the latest quarter rose by 0.5%, whilst online sales increased 7%.

The department store group said the UK trading environment had been weaker since the new year, particularly in clothing. However, it added that its strategy to increase the mix of non-clothing sales has supported its performance against this background, with health & beauty sales in particular continuing to show “good growth”.

Michael Sharp, who will be replaced this week by Amazon executive Sergio Bucher as Chief Executive, said: “Our strategy remains unchanged, with further progress in driving our non-clothing mix, continuing to improve service for multi-channel customers, and offering a wider choice of products and services in under-optimised space. In response to more uncertain trading conditions in this period, particularly in clothing, we have focused on managing stock and margins and generating cash.

“I am confident that I am leaving the business in the hands of a very strong management team, who will continue to execute our strategy and support our new CEO, Sergio Bucher, through the next phase of Debenhams’ development. Our wide product choice, clear destination departments and improving service proposition gives us a strong platform from which to deliver long term sustainable growth.”

NAM Implications:
  • New CEO, with Amazon background, has to result in enhancement of online
  • …at least