Debenhams plans to close 50 stores in 3-5 years

During the year, the company revitalised fashion product under new leadership and held share in clothing, and gained in womenswear. It also improved in-store experience for customers, with 9 stores trading in new design format and new service model. The company accelerated cost reduction activity with £12 million savings achieved, annualising to £20 million.

"It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging. Working with our new CFO Rachel Osborne, and the board, I am determined to maintain rigorous cost and capital discipline and to prioritise investment to achieve profitable growth. At the same time, we are taking tough decisions on stores where financial performance is likely to deteriorate over time," Sergio Bucher, CEO, said.

The company's gross transaction value decreased 1.8 per cent to £2,900.4 million and the revenue decreased 2.5 per cent to £2,277.0 million. Like-for-like sales decreased 2.3 per cent on a reported basis and 2.7 per cent on a constant currency basis. Our core markets of fashion and beauty were weak during the period. UK EBITDA declined 35.6 per cent whilst international EBITDA grew by 5.3 per cent, with Magasin du Nord in Denmark delivering further progress despite a weaker market background.

"Debenhams remains a strong and trusted brand with 19 million customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market. With a strengthened balance sheet, we will focus investment behind," Bucher added.

It has been a tough year for UK retail and the retailer's trading performance in FY18 reflects that. Nevertheless, the company has seen the first positive signs of results in its Debenhams Redesigned strategy that shows transformation is gaining traction. Against the backdrop of a rapidly-changing retail market, it identified five priority actions in April that would help to mitigate the effects of a volatile marketplace; that can be scaled quickly; and are expected to be faster-returning.

"We now have a clear vision of what the future of our stores could look like, embodied in our Watford store. With the support of our landlords, we will be able to replicate the key elements of the store of the future across the c.100 stores where we expect to see a positive return. We are planning for digital to account for approximately 30% of our business, compared with c20 per cent currently, centred around mobile interaction with our customers," concluded Bucher. (RR)

Fibre2Fashion News Desk – India