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Friday 28 April 2017

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Digital the focus in Debenhams’ overhaul strategy

Written by Chris Lemmon
21/04/2017

Department store chain Debenhams has unveiled a new transformation strategy which includes greater investment in digital, but also includes plans to review the closure of up to 10 UK stores and 11 warehouses over the next five years.

The news comes as Debenhams posted a half-year pre-tax profit decline of 6.4 per cent to £87.8 million, despite a 64 per cent increase in mobile orders.

The new strategy, labelled ‘Debenhams Redesigned’, aims to deliver growth by becoming ‘a destination, digital and different’. The retailer wants its stores to be a destination for ‘social shopping’, offering new products, services and experiences. Creation and management of brands will now be supported in a more innovative way, the firm said.

Digitisation is key for Debenhams in its new strategy, as a mobile-first approach aims to broaden the reach both in the UK and internationally. The statement said that it wants to “remove barriers to shopping both online and in-store, making more effective use of people, inventory and infrastructure.”

Around 2,000 staff roles will be switched to more customer-facing roles; there will be a 10 per cent reduction in stock options with faster stock replenishment; consultations will begin on the closure of 11 regional warehousing facilities; there will be a review of 10 UK stores; and the firm will exit some brands and non-core international markets.

Sergio Bucher, chief executive of Debenhams, said: “Our customers are changing the way they shop and we are changing too. Shopping with Debenhams should be effortless, reliable and fun whichever channel our customers use. We will be a destination for "social shopping" with mobile the unifying platform for interacting with our customers. “

“If we deliver differentiated and distinctive brands, services and experiences both online and in stores, our customers will visit us more frequently and, having simplified our operations to make us more efficient, we will be able to serve them better and make better use of our resources.”

However the Union of Shop, Distributive and Allied Workers (Usdaw) waded in to express their apprehension. David Gill, Usdaw national officer, said: “Usdaw is the trade union for Debenhams' workers and our members are contacting us to express concern about the uncertainty they now face. So we are seeking an urgent meeting with the company to see the details of their proposals. If the company ultimately presses ahead with store closures we expect to be able to interrogate their business case as part of the statutory consultation.”



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