Debenhams sees second half lift
Department store chain Debenhams is seeing progress in its attempts to boost profits thanks to greater control of discounting.
The chain, which has 160 UK stores and 85 branches overseas, saw operating profit rise by 2.9% in the six months to 30 August as it cut back on promotional offers and was able to sell more products at full-price.
First half operating profit had been cut by 22.9% after weak pre-Christmas sales leading to higher than normal levels of stock being sold in the January sale.
'We achieved higher full price sales and fewer days on promotion as a result of greater clarity on our promotional calendar resulting in an improved gross margin. We have also made good progress on our work to drive better returns from our space. Developing a more convenient and competitive online fulfilment offer has been a key priority and we enter this year's peak trading period with a much improved range of delivery options. We expect further benefits to accrue from these priorities going forward,' says Michael Sharp, Debenhams chief executive
'Customers tell us that although they are encouraged by economic improvements this has yet to translate into higher disposable income and the market remains tough. We therefore remain cautious about the outlook and will continue to plan prudently. Whilst this has been a challenging year for Debenhams, the brand is strong and our improved second half performance gives us confidence that we are ready for the key Christmas period and can deliver sustainable growth over the longer term.'
Despite the second half increase, UK operating profits fell by 24.3% to £96.3m.