Debenhams reports 84% profit drop

Debenhams has reported that its pre-tax profits are down 84 per cent from £87.8 million to £13.5 million during the half year to 3 March.

Like-for-like sales declined 2.2 per cent, amid a “challenging UK market background” when during the final trading week extreme weather conditions temporarily closed almost 100 stores.

The department store, which issued a profit warning back in January, also revealed chief financial officer Matt Smith is leaving to take up the position of finance chief at Selfridges.

However, digital growth of 9.7 per cent continued to outpace the overall market, driven by website improvements, mobile platform acceleration and improved conversion rates.

Orders via smartphones grew by 35 per cent in the first half and now account for a third of digital sales. “Our partnership with Mobify to implement progressive web application technology - focusing initially on the speed of our mobile website - has helped to drive a 16 per cent improvement in smartphone conversion rates,” added the statement.

The retailer is therefore focusing on five priority actions “to mitigate fast-changing market conditions and drive progress into next year. These include delivering above-market digital sales growth driven by technological change focused on mobile and changing the in-store experience for customers both through redesigned service model and store presentation.

The statement detailed digital plans, with a more aggressive approach in digital marketing, particularly where there is an opportunity to drive store traffic. “The ability to interact with mobile customers - via push notifications, for example - will support our ambition to drive faster digital growth as well as to personalise customer relationships.”

Chief executive Sergio Bucher admitted it has not been an easy first half. “But I am hugely encouraged by the progress we are making to transform Debenhams for our customers. Our digital growth continues to outpace the market and we are holding share in a difficult fashion market.”

    Share Story:

Recent Stories


The Very Group
The Very Group transformed range and assortment planning using Board.

Watch the full video

Smarter merchandise planning across the retail value chain
In this webinar, Matt Hopkins, Head of Retail Solutions, Board, Catherine Tooke, SVP Product & Planning, Sweaty Betty, and Subir Gupta, Managing Principal, Thought Provoking Consulting join Retail Systems Editor Jonathan Easton to discuss the findings of the recent Retail Systems report The Merchandise Planning Challenge: How are retailers harnessing technology to optimise planning and retain customers? and examine the innovations that are improving retail planning.