Debenhams unveils turnaround strategy

Department store group Debenhams has announced a turnaround strategy aimed at boosting its appeal as a “destination” shop and improving its online offering.

The plan includes a review of up to 10 of its 165 UK stores for possible closure over the next five years.

A central distribution warehouse and about 10 smaller warehouses could also close.

Debenhams saw half-year pre-tax profits fall by 6.4% to £87.8m.

Its shares fell by 3.5% following the announcement.

Chief executive Sergio Bucher said customers were changing the way they shop and Debenhams was also changing.

“We will be a destination for social shopping, with mobile the unifying platform for interacting with our customers,” he said.

Debenhams said that leisure activities accounted for an increasing share of consumer spending and that the “leisure experience is an important part of shopping”, while “mobile interaction” was growing fast.

In an effort to capture this market, Debenhams plans to step up investment in in-store cafes, restaurants and beauty services.

‘Disappointed’

Debenhams said it had begun consulting on the closure of one central distribution centre in Northamptonshire which employs about 200 people. All staff are expected to be redeployed.

It is also consulting on the closure of about about 10 smaller regional warehousing facilities, connected to stores. The staff will be moved into the stores.

However, independent retail analyst Nick Bubb said he was “disappointed” that the strategy did not include any targets for sales and profits, despite the talk of growth and efficiency.

Debenhams has 240 stores in 27 countries.

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