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Debenhams restructures to build for overseas growth

Debenhams is restructuring its international division, axing a number of existing roles while creating new “specialist” jobs as it positions the business for further international growth.

Drapers understands the department store group is in a 45-day consultation period with staff, and the changes could affect between 50 and 100 employees.

It is thought Debenhams staff are having to reapply to secure redefined jobs, which will include specific roles such as merchandising, and go through an interview process. It is understood a number of individuals are seeking employment outside the business as a result.

One source told Drapers the management was looking to overhaul the team because “the current model isn’t working”, while a second source indicated the old structure had become outdated.

A spokeswoman said the restructure would lead to an overall increase in the number of staff “as we strive to become a truly international business” and that Debenhams would be looking to recruit externally to fill those positions. However, she would not comment on how many jobs would be created or how many redundancies were expected.

She said: “Expanding our brand internationally is one of the four pillars of our business strategy. We are currently restructuring our international division to meet the needs of our growing operation.”

She added that Debenhams was “hopeful that everyone affected will find an alternative role either within international or our wider business”.

The retailer has 62 franchise stores in 24 countries, including India, Kuwait and Russia, as well 11

Debenhams stores in the Republic of Ireland and six Magasin du Nord department stores in Denmark. It also delivers to 66 countries from its website. The company plans to open 27 more stores worldwide in the short to medium term, targeting 150 on a longer-term basis.

In its most recent results for the year to August 31, international growth outpaced that of the UK, with gross revenues up 3.7% compared with 2.3% domestically.

However, pre-tax profits for the period fell 2.7% to £154m. This week it emerged that Debenhams’ top management team would miss out on their bonuses as a result.

Chief executive Michael Sharp saw his total pay package drop to £754,000 in 2013, down 22% on last year, after missing out on a potential bonus worth 100% of his £615,000 a year basic salary.

Chief financial officer Simon Herrick’s pay fell 8% to £489,800, Debenhams’ annual report, published on Monday, showed.

Both executives could have taken a cash bonus worth 2% of their salaries despite the fall in profits, but they elected not to take the cash “in the light of overall profit performance”.

Talking about Debenhams’ performance two weeks ago, Sharp highlighted the difficult trading conditions, adding that he was “cautious about the strength and pace of consumer recovery in 2014”.

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