Debenhams reports slight rise in like-for-like sales
In the 14 weeks to 7 June 2014, like-for-like sales edged up 0.7% while group gross transaction value increased by 1.6%.
Debenhams announced back in April that it was planning to revise its promotional strategy to include more clearly defined promotional periods with fewer days on promotion after first half profits dropped by 24.5%.
In an interim management statement issued today, the retailer said more prudent sales targets and tighter buying had enabled it to start refocusing its promotional strategy which has resulted in higher full price sell-through.
Debenhams chief executive Michael Sharp commented: "The foundation of our business is the strength of our product proposition which meets our customers' needs for choice, quality and value. In April we set out five priorities to address the challenges that Debenhams faced in the first half of the year.
“Our performance in the second half reflects the work we have done, particularly to refocus our promotional activity. Although early days, this strategy is delivering higher full price sales and we expect to see the benefit through gross margin progression in the second half of the year and in 2015.”
Debenhams said the rate of decline in UK stores had slowed compared with the first half of the year, helped by a good performance from its flagship Oxford Street store as it traded its first full quarter following a refurbishment. Meanwhile, online sales continued to grow.
The retailer also revealed that sportswear retailer Sports Direct will open two trial concessions in Debenhams stores in Harrow and Southsea during August with the potential for more stores by the end of the year. In addition, coffee brand Costa will launch concessions in the Guildford and Slough stores in June and in the Derby, Exeter, Haverfordwest and Woking shops in July.
Looking ahead Sharp added: "Whilst it is clear that consumers are aware of improvements in economic indicators, they are not yet seeing a significant improvement in their disposable income. Our outlook for the full year remains unchanged."
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