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Debenhams seeks to 'change perceptions' among consumers and brands

Debenhams is looking to “bridge the gap in sales density” between its own brands and third-party  labels, by increasing its own-brand teams and testing a series of initiatives.

The department store business last week revealed it recorded a 2.7% dip in pre-tax profits to £154m despite growing like-for-likes 2% in the year to August 31. It blamed challenging weather conditions in the first half for much of the decline, as well as exceptional costs such as the £25m Oxford Street revamp.

Despite this the business said it was investing for future growth, and was looking to woo both consumers and new brand partners in future.

Chief executive Michael Sharp said: “Typically in womenswear, concessions get double the sales density that our own brands get, so the question is how do you bridge that gap? We have done some trials and what we have seen has been very encouraging.”

The most successful move so far has been to double the buying and merchandising teams behind own brands such as Principles and Red Herring to bring “greater focus on product development”.

“So far we have been able to bridge 15% of that gap by investing in our buying and merchandising resources,” Sharp said.

Debenhams is also trialling an increase in dedicated staff for own brand areas in 16 stores to see if there is any impact on sales. “Those results are inconclusive, so we will continue with those trials and make our decisions in January,” he said.

The business is also making better use of data to send out more bespoke marketing emails, Sharp said.

Simultaneously it has trialled new delivery charges – raising the threshold for free delivery to £50 from £30 and offering a premium next-day delivery for a £5.99 fee – to make fulfilment more cost effective.

Debenhams group trading director Suzanne Harlow said the new-look Oxford Street store, which is due to be completed early next year, would act as a calling card to attract new brands over the next two to three years.

Harlow declined to name brands on her wish list but said they would be more aspirational, “bridging the gap between us and House of Fraser, although I think HoF will remain slightly more premium.”

“Discussions [with brands] have not begun because we feel people have really got to see it in the flesh, but we think people will start to contact us when they do,” Sharp added. “It will change perceptions.”

Readers' comments (1)

  • Debenhams do need to move more upmarket as I don't believe their current model is sustainable. While HOF is a deeply flawed business, it's where they should be.

    However, it should not be right in thinking that moving more towards their own brands is the way forward. It is not. The margins are higher, granted, but the vast majority of consumers want branded goods and if Debenhams has premium aspirations, that's the way to go.

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