Debenhams is to roll out Sports Direct concessions to a further four stores by August this year and eight more by August 2016, totalling 200,000 sq ft of space.
Debenhams chief executive Michael Sharp said the initial trials in Bristol, Guildford in Surrey, Harrow in London and Southsea in Portsmouth have been “encouraging”. The department store retailer opened the first concessions last summer as part of a strategy to optimise 1 million sq ft of underperforming space.
Around a fifth of the space has now been filled by concessions including Sports Direct, Costa, Monsoon, Mothercare and Danish brands Only and Jack & Jones. This will increase to 30% by September and 50% by this time next year.
Sharp said the fact that Sports Direct had bought shares in the company “plays absolutely no part in the commercial arrangement”. “They are two separate issues,” he added.
He also said he was not worried about how the recent negative press surrounding Sports Direct [in relation to USC and zero-hours contracts] would impact on Debenhams.
“I think they are a good partner for Debenhams,” he said.
Sharp was speaking as Debenhams reported better than expected results for the six months to February 28, posting a 4.3% rise in pre-tax profit to £88.9m.
The retailer has been refocusing its promotional strategy since last April and Sharp said it was “on the right track”.
“Promotions are part of what customers like about Debenhams, so it would be wrong to assume that we want to do no promotions. What we want is to refocus our promotional strategy so that there is more light and shade in the calendar – so when we are on promotion, we are on promotion, and when we’re not, we’re not.”
He said that customers had reacted positively to the changes and that they said value for money had improved despite the retailer holding less promotions, according to an internal brand tracker.
“Customers also told us that service levels were better over this Christmas than the last one. I think that is because our staff are more focused on providing service and less focused on launching promotions.”
Going forward, Sharp said the strategy will be a combination of “right price, first price” and having less stock on promotion and shallower discounts.
Debenhams also extended its next-day delivery cut-off for home or click-and-collect from 7pm to 9pm, and from 10pm to midnight for evening delivery.