20 April 2024, 07:53
By Furniture News Oct 26, 2017

Profits fall as Debenhams implements new strategy

UK LFL sales at Debenhams were flat for the 52 weeks to 2nd September 2017 at 0%, with growth in the retailer's Destination categories and strong digital momentum offset by a weaker H2 trading environment.

Digital sales grew by +12.7%, driven by mobile orders, which were up +57% in the UK. While international EBITDA grew +8.0%, UK EBITDA declined -10.1%.

Profit after tax but before exceptional items decreased by -15.7% to £78m. Profit after tax after accounting for exceptional items decreased by -40.8%. 

Sergio Bucher, CEO, comments: "We are making good progress with implementing our new strategy, Debenhams Redesigned, and are encouraged by the results from our initial trials, as well as the number of exciting new partners who want to work with us. There is a lot to do but I am delighted with the enthusiasm and flair shown by my colleagues as we embark on this journey. I'd like to thank the whole team for delivering these results against a background of rapid change in the business.
 
"The environment remains uncertain and we face tough comparatives over the key Christmas weeks. However, we are well prepared for peak trading and the early signs from our activity to date confirm that we are moving in the right direction towards a successful and profitable future for Debenhams."

Debenhams has established 'test labs' for new format trials in its new Stevenage and Wolverhampton stores, which are delivering "very positive initial results". Indeed, the retailer says that its Home offer in Stevenage has performed as well as top stores in the chain, despite trading from half the footprint, and with 35% fewer SKUs.

The retailer has also closed 10 regional warehouses, exited four franchise markets, and will close two stores in early 2018. 

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