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Debenhams CEO hails online performance

Department store chain Debenhams has today (17 September) reported a 46.2% year-on-year increase in online sales for the year to 31 August, with CEO Michael Sharp saying the retailer has a "relentless focus" on becoming a leading international, multichannel brand.

According to Kantar Worldpanel Fashion statistics, the company's share of the online fashion market in the 24 weeks to 4 August stood at 3.7%, which represented an increase of 50 basis points compared to the same period in 2012.

Improved multichannel performance at Debenhams, announced in today's trading update ahead of a full-year results statement in October, follows last week's raft of retailer results which showed that businesses are continuing to increase their focus on mobile and online sales.

And as seen on the recent BBC series Robert Preston Goes Shopping, many of the UK's leading retail executives, including Sainsbury's CEO Justin King, believe mCommerce is the key battleground for retailers in the five years ahead as smartphone adoption continues its rapid ascent.

On that subject, Debenhams said today that visits to its website via mobile devices were up 72% compared to last year, while revenue generated through these platforms increased by 128% during the year. Progress made with the retailer's mobile strategy is part of its aim to increase availability and choice through multichannel.

Daniel Lucht, director at retail analyst firm Research Farm, told Essential Retail that Debenhams is currently following the right online strategy and he commended the company's Endless Aisle initiative, which sees customers' online orders fulfilled from both warehouses and stores.

"The next step for Debenhams is to further link its current multichannel platforms with click & collect and same-day delivery," he added.

"Another driver of success is the Designers at Debenhams own-brand range, which cuts out price comparison online because it is a unique line – this is a core ingredient of the business."

International expansion is another key area of focus for the department store group, with its Danish retail chain Magasin du Nord reporting like-for-like sales growth of 6% for the year. International online sales reportedly continued to grow quickly too, albeit from a small base, and Lucht sees plenty of opportunity for Debenhams in this field.

"Online clothing is booming right now and there is an opportunity to gain significant international market share," he argued. "Unlike other fashion retailers, Debenhams doesn't need to worry about cannibalisation of stores in international territories by pushing online."

Including physical stores, Debenhams group gross transaction value over the 12-month period was up 2.5% year on year, while like-for-like sales were up 2%. Full-year results will be released on 24 October 2013.

CEO Sharp said: "I am pleased with our performance in the final quarter of the year. We have succeeded in growing both like-for-like sales and market share in a competitive market where consumers' disposable income remains under pressure. I am particularly pleased with the growth of our online business.

"While the return to more seasonal weather conditions over the summer has been helpful, the main factor behind this performance has been the relentless focus of everyone at Debenhams on implementing the four pillars of our strategy to create a leading international, multichannel brand."

www.researchfarm.co.uk

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