Debenhams have a not so good Christmas

While Next reported an excellent Christmas season, high street rivals Debenhams have said that like-for-like sales in the 17 weeks to 30th December were down 1.3% on 2016.

Group like-for-like sales in constant currency declined (1.8 per cent), including UK LFL down (2.6 per cent) and International up 2.1 per cent. Digital sales rose 9.9 per cent.

Debenhams said in a statement, “The early weeks of the quarter were disappointing as the market remained volatile and competitive. We took tactical promotional action to improve our performance which resulted in a stronger 6 week Christmas period against tough comparatives, with LFL sales up 1.2 per cent in constant currency and digital growth of 15.1 per cent However, the first week of post-Christmas Sale was below expectations despite further markdown investment, particularly in the highly seasonal Gift category.”

Debenhams responded to competitor discounting by managing inventory tightly through tactical promotional activity while flowing stock more efficiently.

“This is reflected in weaker gross margins, but as a result, we expect to exit H1 with stock levels down year on year in line with our plan.”

The retailer has been working on a new, more flexible operating model as part of a plan to simplify and focus its operations. It said this would result in reorganisation and restructuring activity both in its stores and in its support centre.