Debenhams delivered better-than-expected profits in the first half of the year against the backdrop of a difficult market. Pretax profit edged up 1.4 percent to £127.1 million, while gross transaction value grew 1.4 percent to £1.48 billion. Online sales continued to grow strongly, increasing by 34.7 percent to £124.3 million for the first half (excluding Debenhams’ Nordic business Magasin). Mobile is Debenhams’ fastest-growing channel and 20 percent of online traffic is now generated by mobile devices.
EBITDA in the multichannel arm increased by 36.4 percent as initiatives to cut fulfilment costs started to take effect; Debenhams is now using an “endless aisle” model that uses stock from the store base as well as fulfilment centres to meet customer demand. The company estimates that some £10 million of potentially lost sales were captured during the period.
The company has set its sights on achieving online sales of £500 million in the “medium term” and expects £100 million to be generated by international sales. During the first half of the year, the number of countries Debenhams delivers to increased from seven to 40. This will increase again to 67 by the end of the summer, it says. The first local language, local currency website will be officially launched in Germany this month to be followed by a number of other sites over the coming months, facilitated by Debenhams’ investment in the IBM Websphere 7 platform.
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