Debenhams on Thursday morning posted a 20.6 per cent decline in full year profit, in line with market expectations as the business focused on ‘long-term sustainable growth’ and addressing the issues it of its first half operational losses.
Britain’s second largest department store chain said underlying pretax profit came in at £110.3 million in the 12 months to 30 August, in line with analysts’ average forecast of £110 million, according to a Reuters poll.
Debenhams said its performance had improved in the second half of the year, but after a warm autumn and winter that damaged its run-up to Christmas 2013 trading, it remained cautious on its outlook.
“Whilst this has been a challenging year for Debenhams, the brand is strong and our improved second half performance gives us confidence that we are ready for the key Christmas period and can deliver sustainable growth over the longer term,” chief executive Michael Sharp said in a statement.
Gross transaction value rose 1.7 per cent to £2,823.9 million for the year, with group like for like sales up 1.0 per cent. The retailer said it had made good progress in its second half against strategic priorities to deliver long-term sustainable growth. As Debenhams looks to step up its game against the highly competitive multi-channel offers of John Lewis and House of Fraser, delivery options are now fully available including next day click & collect and a 10pm cut-off for next day delivery to home.
Looking forward to the changes at hand, Sharp added: “We achieved higher full price sales and fewer days on promotion as a result of greater clarity on our promotional calendar resulting in an improved gross margin. We have also made good progress on our work to drive better returns from our space. Developing a more convenient and competitive online fulfilment offer has been a key priority and we enter this year’s peak trading period with a much improved range of delivery options. We expect further benefits to accrue from these priorities going forward.”