Debenhams tweaks delivery options in time for festive season

Debenhams has introduced a number of multichannel developments ahead of the expected busy Christmas period, following a challenging year for the department store chain.

In a full-year results announcement published on Thursday, which highlighted a 24% year-on-year slump in profit before tax for the 12 months to 30 August 2014, the business indicated that it has successfully launched a next-day click & collect service and significantly increased order cut-off times for next-day delivery – from 2pm to 10pm.

Evening and weekend deliveries, and nominated day deliveries, have also been added to the retailer's list of fulfilment options as it prepares for the traditional upturn in orders and sales as Christmas approaches.

While Debenhams reported that gross margin was down 60bps for the year, there was an improvement in the second half as the company focused on selling more ranges at full price and fewer days on promotion. Overall reported profit for the year totalled £105.8 million.

Industry commentators often cite Debenhams as one of the UK retailers closest to operating the omnichannel model that many businesses in the industry are aspiring to create, with its endless aisle format ensuring orders are fulfilled from warehouse and stores. However, the business blamed last winter's unseasonably warm weather and low consumer confidence for sluggish sales in the first half of its financial year, which led to a profit warning earlier in 2014.

Multichannel development continues apace, though, with the retailer announcing that group online EBITDA was up 20.5% year on year. Online and mobile channel sales have grown significantly. Like-for-like sales across the whole business were up 1% compared to the previous 12-month period.

How is Debenhams achieving its goal of increasing availability and choice through multichannel? (stats for the year to 30 August 2014)

Michael Sharp, CEO of Debenhams, said: "After the challenges we faced in the first half, everyone in the business has been focused on addressing the issues we identified and on delivering on the priorities we set out in April to deliver long-term sustainable growth. 

"Our performance in the second half reflects this with operating profit up on the previous year.

"Developing a more convenient and competitive online fulfilment offer has been a key priority and we enter this year's peak trading period with a much improved range of delivery options.  We expect further benefits to accrue from these priorities going forward."