Profits at Debenhams down 2.7% despite surge in online sales
Debenhams has reported a 2.7% fall in its full-year pre-tax profits despite a sharp rise in online sales
In the year to 31 August 2013, the department store’s profits dipped to £154 million from £158.3 million in the previous year. Group sales rose 2.5% to £2.78 billion while like-for-like sales climbed 2%.
Online sales surged by 46.2% to £366.3 million to account for 13.2% of total sales, up from 9.3% in the previous year. Online like-for-like sales rose by 4.1% as the number of visitors to Debenhams.com increased by 36% to 241 million. This included a 200% increase in visits from mobile devices which now account for 25% of online sales.
The like-for-like sales increase online offset a fall of 2.7% in the retailer’s stores. Two new stores in Chesterfield and Lichfield were opened during the year and a further four stores will open in 2014 in Cheshire Oaks, Haverfordwest, Hereford and Leamington Spa.
Never Miss a Retail Update!International sales increased by 3.7% to £522 million.
Michael Sharp, Debenhams chief executive, said: “I am pleased with our performance in 2013 given the very difficult conditions. We gained market share in key categories, demonstrating the competitiveness of our product offer. We continue to deliver growth and additional customer benefits through our strong multi-channel capabilities. At the same time, we are working hard to ensure our UK stores adapt to the challenge of their changing role in a multi-channel world.
“More widely, whilst consumer confidence may be showing signs of improvement, we expect that household incomes will remain under pressure from inflation growing ahead of wages. With this in mind, we remain cautious about the strength and pace of any consumer recovery in 2014 and expect the marketplace to remain highly competitive.”
Debenhams said the revamp of its flagship store in London’s Oxford Street was on track ahead of its launch in December 2013.
