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Debenhams trialling online shopping in smaller stores

Debenhams is to pilot online shopping areas on the shopfloors of its medium-sized department stores in a bid to grow market share in the stagnant trading environment.

Chief executive Rob Templeman, who last week announced he would retire from the business (see box, right), said he was planning for “no real change in consumer confidence” in the next six months and that the development of Debenhams’ multichannel strategy would “offer big growth potential” in a “lowgrowth market”. He said: “Every retailer will be cautious about the next six months. We have to think about how we can drive more share.”

The retailer, which said profits rose 4.5% to £129m in the 26 weeks to February 26 on like-for-like sales excluding VAT down 1.5%, already has small online kiosks in 30 stores, which will go into all 167 UK and Republic of Ireland stores within six months.

Designated online shopping areas will be introduced into its mediumsized stores alongside its services desks - such as customer services - where shoppers will be able to browse and shop its full product offer. The online areas will feature TVs, iPads, computers and soft seating.

“It gives some of my smallest stores access to full ranges, the opportunity to expand in areas that are not available in stores but which are available online,” said Templeman. The online shopping areas will be trialled in stores in Coventry, Bedford and Fareham in Hampshire. Debenhams will also launch multicurrency,
multilingual websites with tailored home pages and promotions in up to 40 new markets. It will target countries such as Australia, New Zealand, Sweden, France and Germany. At present it has a euro currency site in the Republic of Ireland. Sales via online arm Debenhams Direct rose 82% in the first half to February 26.

Debenhams is eyeing growth in all categories after recording a 50 basis points rise in women’s casualwear and a 20 basis points rise in menswear in the 24 weeks to February 20, according to Kantar Worldpanel.

Templeman added that he was “taking share off everyone” and that Debenhams did not “recognise the big sales fall-off that others have [in recent weeks]”. He added that the mid-market was “a bit more resilient” than the value end.

Of consumer sentiment he added:”Fashion and newness are driving performance, not price.” Templeman also signalled that record cotton price levels could be
about to fall, providing much-needed respite for retailers and consumers. Cotton futures are priced 30% down and he is forecasting a good cotton crop. He said any price decrease would feed through in late spring, early summer 2012, but declined to provide a figure. Debenhams’ prices for autumn 11 are set to rise by
between 10% and 11%.

Drapers comment

Deal-making junkie Rob Templeman has finally decided to take his Benson & Hedges and head for the exit.

His eight-year tenure as chief executive of Debenhams has been turbulent. The City’s whipping boy has latterly boasted the sixth consecutive period of growth at the
retailer and the paying down of almost £1bn of the £1.3bn of debt it floated with in 2006. It is a good time for him to go.

Templeman’s succession plan has long been for deputy Michael Sharp to head up the business when he leaves in September. Sharp must be chomping at the bit,
so long has speculation surrounded Templeman’s retirement plans.

Sharp is a (ahem) sharp operator. What he doesn’t know about product and supply chain isn’t worth knowing. While Templeman will stay on as a consultant for a year after leaving, you can bet he will resurface as part of another retail deal very quickly.

Amy Shields, news editor

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