Debenhams cracks down on costs
Sales up but trading slow
July 23 2002
Department store operator Debenhams is looking for cost savings in order to maintain its margins in a toughening sales environment.
Like-for-like sales were up 6.2 per cent in the 20 weeks to July 20, with total sales were up 6.9 per cent. On a two year basis Debenhams is showing like-for-like growth of almost 15 per cent.
The company said its summer stock sale, which began July 8, “had a slow start which affected an important trading period.”
Gross margin was down 0.6 per cent over the period, mainly because of additional promotional activity on summer due to bad weather.
Belinda Earl, chief executive, said: “We are actively managing the business to support sales whilst controlling both costs and stock levels. However, our expectations for the second half of the financial year reflect the reduced gross margin currently being achieved.
Despite the prevailing market conditions, we remain confident in our strategy and are continuing to see strong returns from our investments.
“We have a number of significant developments planned for the next financial year including five new store openings and participation in a major new loyalty scheme.”
Debenhams is to join Sainsbury’s BP and Barclaycard in the new Nectar loyalty card scheme which launches this autumn.
