Debenhams-Announces-Drop-in-Third-Quarter-Sales

Debenhams Announces Drop in Third Quarter Sales

Debenhams has posted its trading update for the year so far up to June 11.

The company revealed growth in LFL sales by 0.2%, while sales online are up by 7%. In the 15 week period, gross transaction value increased by 0.5%, which took the cumulative YOY performance to a 1.3% rise.

The firm is expecting the introduction of the National Living Wage to impact growth in the volatile trading environment, but anticipates its full results for the year results to be in line with its expectations.

Michael Sharp, chief executive, said that Debenhams strategy remains the same, with more progression in driving its non-clothing mix and continuing to improve service for multichannel customers.

He added that the company also offers a wider choice of services and products in an under-optimised space.

Mr Sharp believes that the company has responded to more uncertain trading conditions in the 15 week period, particularly in clothing, and they have primarily focused on stock management and cash generation.

He remains confident about leaving the business in the hands of a strong management team, who will persist with the execution of the firm’s strategy and help Debenhams’ new CEO, Sergio Bucher, in the next series of development for Debenhams.

Mr Sharp added that the high street giant’s wide range of products, improving service proposition and clear destination departments give them a strong platform for the delivery of long term sustainable growth.

Senior market analyst at www.spreadex.com, Connor Campbell commented that this was not the ideal time for Debenhams to post a drop in third quarter sales given the recent collapse of BHS looming large over high streets in the UK.

In the 15 weeks up to June 11, LFLs fell 0.2% and Mr Campbell believes that this will become 1/6% when the effects of currency movements have been discarded.

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