Debenhams cuts bargains and lifts profit
EFFORTS to scale back on bargains and promotions has paid off for Debenhams after cheering investors yesterday with better-than-expected first half profits.
Pre-tax profits rose 4.3 per cent to £88.9m for the 26 weeks to 28 February, beating consensus forecasts for profits of £85.6m.
Britain’s second-biggest department store chain has been trying to wean customers off regular promotions after heavy discounting during 2013’s festive season to move stock caused a sharp decline in annual profits.
As well as holding fewer promotional days, it has also made improvements to its online service such as launching next-day click and collect and extending the cut-off for next-day deliveries to 10pm.
It is also trialling concessions in its stores with retailers including Sports Direct, Costa, Monsoon and Mothercare in attempt to boost returns from underused space.
“I think these set of results prove that the strategies we established over a year ago are the right thing for Debenhams,” chief executive Michael Sharp said, adding that the firm was on track to achieve full-year expectations.
He added that Sports Direct’s four concessions had been well-received and that a further 12 will be added by 2016. Costa Coffee and Monsoon will also double the number of concessions.