Retailer Debenhams Set to Boost Ailing Profit Margins with Streamlined Offerings
Following the announcement of a profit warning in January, Debenhams has decided to tackle the "sea of red" that chief executive Michael Sharp has mentioned by "refocusing" its promotional strategy.
The retailer has been offering consumers major discounts over the Christmas period and beyond, which sent their profits dropping by nearly a quarter in the first-half of the financial year.
While in-store promotions have boosted sales, the margins were low, resulting in the company's pre-tax profit falling by 24.5% to £85.2m in the 26 weeks to 1 March. Meanwhile, its core UK business profit fell even more sharply by 28.4%.
To turn the tides on slumping profits yet encourage buoyant sales, Debenhams plans to continue offering promotion days but fewer of them. They will also be introducing more 'clearly defined' sale periods.
Additionally, Debenhams has recently expanded its multi-channel offering to consumers, including next day click-and-collect plus an extension of the cut-off for next day delivery from 2pm to 10pm. The company is further gearing up to strengthen their mobile offering.