Debenhams invests in womenswear push as it grabs share

The retailer has grabbed market share from womenswear competitors, with share advancing 20 basis points over the 12 weeks to August 5.

Debenhams chief executive Michael Sharp said: “You can never tell where it’s coming from. Our biggest competition is Next and Marks & Spencer so the likelihood is that it’s from that direction.”

Marks & Spencer’s clothing sales were impacted in its first quarter to June 30, when general merchandise sales plunged 6.8%, while Next last week reported that August and September had been “disappointing”.

In contrast, Sharp said trading had been strong over the period with like-for-likes edging up 3.7%, excluding VAT, in the 10 weeks to September 1.

“There’s no sign of a slowdown at all,” he said. “August especially was very strong. Customers have liked the launch of our autumn/winter product.”

Combination trading, by which the retailer launched new season stock while selling down summer stock, has helped drive the sales increase, according to Sharp.

The department store’s like-for-likes grew 1.6% in the 52 weeks to September 1, with sales growth accelerating throughout the year. Its second half like-for-likes nudged up 3.3% and 3.7% in the final 10 weeks of the period.

Sharp said he was “delighted” with the performance in what he said was the most challenging retail conditions he had experienced. He said competitors had become increasingly promotional over the year.

Consumer sentiment remained unchanged, according to Sharp although he said it had “flattened off”.

He said: “It’s going to be a number of years until we can see any recovery in terms of the economy giving retail any benefit.”

The department store expects pre-tax profits to be ahead of last year and to be in line with market expectations.

Debenhams is investing further in product development in the category and is eyeing growing the accessories part of its business.

Sharp said: “We’re looking at areas where we want to grow. We’re investing to give us the capacity to realise those opportunities. Womenswear is our largest business and we want that to continue. We are number one in handbags and fifth or sixth for women’s footwear. There is an opportunity is to double our shoe business.”

It has also added another designer to its stable with London based Marios Schwab launching a contemporary womenswear collection under its “next generation” Edition label.