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Debenhams sales soar amid expansion

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Department store Debenhams has seen total sales rise 2.6 per cent in its full year as its international expansion and multichannel strategies boosted profit, according to results released today.

For the 52 weeks ended September 1st 2012, group like-for-like sales increased 2.3 per cent including VAT while group profit before tax grew 4.2 per cent to £158.3 million.

Group online sales surged 39.8 per cent to £250.6 million and as a result, the retailer has increased its medium-term target for online sales by 20 per cent to £600 million.

Debenhams CEO Michael Sharp said: “We have made good progress in 2012, achieving higher sales and earnings growth despite a very difficult market.

“I believe the strong sales momentum we achieved in the second half of 2012 is clear evidence that our strategy to build a leading international, multichannel brand is working and this has prompted us to be more ambitious with our medium-term targets for the growth of our online and international operations.”

As part of its multichannel investment, Debenhams rolled out free Wi-Fi across its UK stores in May which contributed to considerable m-commerce growth as visits via mobile rocketed 200 per cent while iPad app visits soared more than 500 per cent.

International sales were up 2.7 per cent on the previous year, including franchise stores which saw a 17.2 per cent sales boost over the period as the retailer continued its expansion plans.

At the end of the year, the total number of international stores, which comprise the Republic of Ireland, Denmark and the franchise stores, was 85 and the department store chain has increased its target number of franchises over the next five years from 130 to 150.

In total, Debenhams’s online reach extended to 67 countries by year-end while it operated from 239 stores across 28 countries and it has focused its attention on improving its product offering and customer proposition across its portfolio.

Having introduced a number of new brands over the period, the chain has invested in marketing and unveiled the ‘Life Made Fabulous’ campaign which boosted sales and, following this success, intends to build a Christmas brand campaign for the first time in six years.

Sharps explained the importance of continued investment despite difficult economic conditions, commenting: “Looking forward, we believe that customers are acclimatised to the new economic reality.

“Whilst we don’t anticipate a significant change in the economic environment in 2013, we expect to make further progress during the year.

“We will always manage cash, costs, stocks and margins closely but we are committed to continue prudent investment in key areas to deliver long-term sustainable growth as well as further returns of capital to drive shareholder value.”

Published on Thursday 25 October by Editorial Assistant

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