Department store group Debenhams has bought the concessions business from beleaguered footwear chain Faith and reported a like-for-like sales fall of 0.4% for the 42 weeks to June 19.
In a move predicted by Drapers, Debenhams has acquired 115 Faith concessions from administrator Mazars after the chain hit the buffers in April.
Mazars received last minute bids for the chain over the last week after failing to secure a buyer by the original May 7 deadline. Since then, Mazars shut Faith’s 78 stores, leaving only 115 Debenhams concessions trading.
Debenhams had been a strong favourite to take over the concessions business because its change of ownership clause gave it a strong say over future ownership of Faith, allowing it to terminate its concession agreement, thought to be the most profitable part of the business, turning over £24m.
Debenhams’ sales performance during the 42 week period was affected by the retailer’s shift to own-bought lines, which pushed the department store’s like-for-like figure down by approximately 1.5% but delivered higher margins.
Gross margin this year is expected to be up 80 basis points and - including the recently acquired Danish chain Magasin du Nord - flat.
Debenhams said it made market share gains in menswear and childrenswear of 20 and 40 basis points respectively. The retailer reported: “Womenswear share continues to be impacted by lower own-bought sales densities.”
Gross transaction value rose by 8.9% in the period. Excluding Magasin du Nord, the rise was 1.1%. Multichannel sales rose 90%.
Debenhams chief executive Rob Templeman was pleased with the performance and said: “2010 has been a year of change for Debenhams and a year when we will judge the performance of the business on profit improvement.”
He said: “Looking forward across the balance of the year, we remain cautious about the strength of the overall retail market and the level of consumer confidence.
“However, we believe that our focus on self-help levers – including increasing gross margin through higher own-bought sales penetration, the recent acquisition of Magasin du Nord, our growing multichannel business and the ongoing store refurbishment programme – will help to mitigate the macro-economic pressures and enable Debenhams to make further progress over the coming year.”