Debenhams like for like sales improve in H1

Debenhams, announcing its half year results for the 26 weeks to February 28, 2015 said that the group like-for-like sales increased 1.3 percent. While the gross margin rate was maintained, profit before tax went up 4.3 percent at 88.9 million pounds (131.7 million dollars).

Refocusing on promotional strategy resulted in 9 percent increase in brand’s full price sell-through in the first half, with tightly controlled stock. The company launched new online delivery options for Peak including next day click & collect and 10 pm cut-off for next day delivery to home. Service improvements drove click & collect growth of 22.1 percent in H1, with next day services accounting for 49 percent of orders in the seven days prior to Christmas.

Commenting on the first half development, Michael Sharp, Chief Executive of Debenhams, said, “Overall we delivered a good first half performance despite a difficult clothing season in autumn and we are on track to achieve full year expectations. Looking forward, our customers tell us that 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, and are continuing to invest to ensure that our business is well-positioned to drive sustainable growth in the longer term.”

Multi-channel continued to grow with online sales up 12.7 percent and mobile penetration accounted for 42 percent of online sales. Investment in the design and buying capability continued with strong performance following the launch of casualwear in Principles by Ben de Lisi, fronted by Sophie Dahl, and the roll out of Hammond & Co, with Savile Row tailor, Patrick Grant. International franchise stores also performed well and Magasin du Nord achieved local currency like for like sales growth of 9.9 percent. During the first half, new Chief Financial Officer, Matt Smith, took charge strengthening the management team.