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Promotional market hits festive sales at Debenhams

Group like-for-like sales at Debenhams dipped 3.4% in the six weeks to 5 January, as the department store chain battled “challenging” trading conditions and the growing pressure to discount.

Group like-for-like sales were also down in the 18 weeks to 5 January. UK sales slipped by 6.2% during the 18-week period, and international sales were down 3.5%. Digital sales were up 4.6%.

Debenhams warned that margins would be hit in the first half of this year after it reinstated “tactical promotional activity” to remain competitive at the end of 2018.

However, the retailer said a revitalised product offer in womenswear had helped improve market share over the festive trading period and that a “differentiated” gifting range had delivered improved margins.

Chief executive Sergio Bucher said: “We have worked hard to deliver the best possible outcome in very uncertain times for retailers. We responded to a significant increase in promotional activity in the market, particularly in key seasonal categories, in order to remain competitive for our customers.

“In order to ensure that Debenhams has a sustainable and profitable future we need a strong customer proposition, a strengthened balance sheet and a reshaped store portfolio.

”We have a robust plan to deliver this and while there is much work still to do, the performance of our ’Redesigned’ stores over peak, and continued outperformance in digital, reinforce our view that we are taking the right steps to protect the future of the business.”

 

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