Debenhams sees record Christmas sales
Debenhams has reported a 2.9% increase in like-for-like sales in the first four months of its financial year as the department store enjoyed its highest ever December sales.
In the 18 weeks to 5 January 2013, the group’s gross transaction value increased by 3.5% while online sales were ahead of expectations, rising by 39%. Online now accounts for 12.6% of the retailer’s total sales compared with 9.3% in the previous financial year.
Like-for-like sales in the five weeks to 5 January rose by 5% on a one year basis and by 8.5% on a two year basis.
Michael Sharp, chief executive of Debenhams, said: “I am pleased with our performance in the first four months of our financial year. The trading environment was extremely challenging but we focused on meeting the needs of our customers and executing the four pillars of our strategy. I would like to thank the whole of the Debenhams team for their tremendous efforts in delivering this performance.”
Never Miss a Retail Update!Debenhams increased its promotions in the run-up to Christmas as customers looked for bargains ahead of Christmas this year, as well as in the traditional sale period. As a result, the group now expects gross margin for the year to be 10 basis points higher than last year rather than 20 basis points as previously guided. The retailer said that stock levels were under control and that terminal stock at the end of the first half will be in line with the long-term average of 2.5-3%.
One new store opened in Chesterfield during the period taking the total number of UK stores to 155. The retailer’s modernised stores continued to trade well and in line with historical performance. A further five store modernisations will begin in January.
Debenhams said it was on track to grow the number of international franchise stores to 150 over the next five years. During the 18 week period, the retailer opened five new stores overseas, including market entry into Bulgaria and Georgia, taking the total number of international stores to 73.
Regarding the outlook, Sharp said: “We continue to believe that whilst consumers have become acclimatised to the new economic reality, we don’t anticipate a significant change in consumer confidence in the remainder of the year. We remain committed to prudent investment in key areas of the business to deliver long-term sustainable growth as well as driving shareholder value.”
