Debenhams reports poor Christmas despite increased mobile sales

Shares in the department store Debenhams fell 20% after the retailer posted a profit warning following disappointing Christmas sales.

Shares recovered to 15% a few hours after the retailer announced it expected full-year profits to now fall between £55 million and £65 million, down from the £83 million expected by analysts.

The retailer reported like-for-like sales down 1.3% for the 17 weeks to 30 December 2017, while its post-Christmas sale period has also been sluggish.

Debenahams chief executive, Sergio Bucher, said: “The market has been challenging and particularly promotional in some of our key seasonal categories and we have responded in order to remain competitive for our customers, which has impacted our profit performance. Nevertheless, we are seeing positive early signs from the changes we have made as part of our Debenhams Redesigned strategy. The market dynamics we have seen have reinforced our view that we need to move even faster to implement the cultural and organisational changes needed to ensure Debenhams is in the best possible shape for today’s fast-changing retail environment.”

At the end of October, Debenhams unveiled a new mobile website combining the best of mobile app and mobile web. Debenhams is the first in the retail industry to launch the cutting-edge technology, which has delivered a 20% improvement in conversion rate, with smartphone sales up 36% year-on-year.

Speaking to Essential Retail late last year, Jim Hingston, senior digital product manager at Debenhams, said the speed of the mobile website was the most noticeable improvement.

“We’ve seen customers are able to complete some journeys over three times faster than the previous site. We are starting to see some behavioural shifts on mobile too like more mobile orders starting to occur in the morning during ‘commuter periods’. Customers are able to browse and buy instead of just browse.”

The department store retailer said digital improvements through its partnership with Mobify will build throughout 2018 and will include more platform upgrades.