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Cut in store promotions lifts the profit at Debenhams

By Graeme Evans

A tighter grip on promotions has helped boost Debenhams' results after the department store chain reported a 4% rise in half-year profits.

The retailer, which has 161 UK stores and 246 outlets worldwide, said there were 14 fewer days on promotion in the six months to February 28 as its profits lifted by more than expected to £88.9m.

A year earlier Debenhams, which has five stores in Northern Ireland, was forced to issue a Christmas profits warning due to poor sales and a botched promotional strategy. The company has since overhauled its pricing and online offer and is also renting out some of its under-used space to other retailers.

Chief executive Michael Sharp said he was pleased with the company's progress after the new promotional strategy helped deliver a strong increase in full price sales.

He added: "Looking forward, our customers tell us they are feeling a little more optimistic about the economic outlook, but they remain cautious.

"Accordingly we are continuing to plan prudently in the near term, while remaining focused on our strategic priorities."

Revenues in the UK grew by 1.7% to £1.1bn, helped by the better Christmas performance and the impact of bringing forward a new season promotion into the first half to coincide with pay day at the end of February.

Two new stores opened during the half in Scunthorpe and Borehamwood, adding 69,000 sq ft of trading space.

Its new store pipeline stands at eight stores, with five set to open in the autumn ready for peak trading. The remaining three are planned to open over the following three years.

 

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