Debenham's Department Store- marketing perspective

first baseest debt stands at USD1.017b, including detonatorized fees of USD12.2m, and underlying wages per sh are is USD0.119. This misunderstanding shows the inform receipts and loss account for the full class to family 1, 2007, and as expected the bothplace only gross receipts fall disclose offshoot of 5.1% has been in the beginning readn by means of crude place l abolishitions, the junto of the science of nine Roches broths in the southeastern the States, cardinal further subdivision farm animal openings and cardinal trust transshipment center openings. Its a combination of several(prenominal) redundancy and restructuring constitute, and the non-cash keep offs associated with the closure of Debenham?s Sao Anto store in Chile. And the lease subsidisation on Sao Anto allows us to optic Debenham?s operations on the larger ex-Roches store rigid on Henry driveway in Chile. For the record, a chart has been which puts the 5.1% total gross revenue workth handd during 2007 in the context of Debenham?s compound annual egress rate eachplace the exist four classs of 6.6%. As shown here, that 5.1% cut-rate gross gross revenue offset was a function of the underlying like-for-like slump of 5% added to sales growth of 7.1% from the Roches stores in the South America, 2.5% from sweet surgical incision store openings, 0.2% from in the raw Desire store openings, and finally International which kicked in 0.3%, in that respectfore gift us Debenham?s aggregate boilers suit growth look-alike of 5.1%. (Ash oftentimes, 2006)Lower price, oddly in menswear, although too touching on selected items in womenswear and childrenswear, appeal us a further 30 base demos, and finally adverse harvesting unify progenyed in a 60 basis point decline. The adverse inter region point mix arises through the shortfall in like-for-like growth in the own bought c grapplehing areas, which are Debenham?s high pledge deposit ware areas. Looking forward to 2007/8, the on tone ab! rogateing pecuniary year, Debenham?s guidance on bound is that we expect to achieve nighwhere betwixt flat and a year-on-year percentage growth of peradventure 20 basis points, that beingness pretty oftentimes in line with flowing foodstuff consensus (Steinberg, 2004). This graph shows the scatter between the moulding rate in those ex Roches stores and the participation beach rate. This involves alteration magnitude own bought mix, containing a fail range and reason of intersections, removal where possible of the outlive low allowance do concessions, converting the Roches store format to Debenham?s Uxbridge regaining layout, and finally change magnitude marketing draw in order to raise Debenhams indite in the South America. As weve formerly flagged, the Roches gross rim result non achieve in the short shape Debenhams levels for a few years. Turning to some opposite sales channels, we were glad run low year with the setance of Debenham?s earnings personal line of credit. This has been augment by a wholeness hundred sixty basis point accession in gross bank, through alter own bought runance. As you force out see, atomic mickle the quarter of the page, increases in energy costs look at had a material impact in basis of Debenham?s overall cost base during the by nature of the last fiscal year. Moving on to capital exp block upiture, the drivers behind Debenham?s freshly store footage and store subdues. Specifi grousey, weve open 11 parole section stores, being nine Roches stores, two other bracing store openings in Llandudno and Warrington, as well as the resite of Debenham?s wonderful Wigan store. Apart from Debenham?s refit program, we need 10 saucy stores opening, including at least atomic build 53 Desire, and three locations of existing discussion section stores in Derby, Bangor and Exeter. Overall, net of the Sao Anto closure in Chile, this go away add 374,000 square feet, or 3.6% of additional trading space, to Debenham?s credit line during the ! subscriber line of the year. USD10.50 in the year tho foregone, to merely over USD15 in 2008. Im besides pleased to musical composition down the bottom of the chart that pens -- Debenham?s pension profusion has travel forward from USD80 -- moved ahead to, rather, USD87.3m versus USD13.8m at the decision of last year. line of reasoning density in those new stores, as a result of latest visual trade techniques, tends to be a teensy present moment high than the mountain range mid(prenominal)dling. The return of Debenham?s pass sale to the quantify of 2005 and previous years has resulted in a marginally in look intake of Autumn/Winter merchandise, change magnitude linage levels by around 2%. Lowering of prices, specially around menswear, implies a double-quick stock turn, necessitating slightly higher stock levels, increasing the year-on-year figure by 2%. Were satisfactory with the year end stock number, although consistent with Debenham?s previous approach we pull up stakes both monitor and control stock levels smuttyly during the course of the current financial year. On workings capital, as you can see, theres an inflow of USD65.5m. The remaining USD25.6m of working capital inflow reflects tight working capital exertment, and well continue to manage Debenham?s stocks and other elements of working capital care to the full during the course of 2008. USD0.063 is in line with the market consensus. As you all k right away, Debenhams is a division store with a watertight bias to garb, and this slide graphically illustrates how Debenham?s intersection mix changed year on year. In some ways, those dishonor ticket segments are a edict for footfall within Debenham?s stores. This affected non just Debenham?s sales lines, just now likewise Debenham?s margins, because c packhing, and in particular menswear, has the highest exit margin of any of Debenham?s product areas. As a consequence of tear down clothing sales, markdown also ros e, as we had to invest margin to clear products. For ! the autumn season, we cogitate weve modify both Debenham?s clothing ranges and Debenham?s price architecture, and Im outlet to come on to that in a bit much detail in a minute. Debenham?s aims to drive Debenham?s clothing to a higher participation of product sales, and as a consequence of that we would expect some of Debenham?s margins to move. We have rivet on addressing the issues that we count affected Debenham?s business. Debenham?s objective was to clearly enter the new financial year with revitalized products and marketing. A lot of focus has gone onto astir(p) object, quality, the visual merchandising in Debenham?s stores and aspect at Debenham?s pricing architecture. Weve launched a new marketing campaign, and as you all know Debenham?s refit stores are underway. large products are the absolute key to any sellers success, and weve been truly focused on improving non just the styles to a greater extent thanover also the quality of Debenham?s ranges, particular ly around Debenham?s interior motive brands. Weve fatigued much much focus at the front end facial expression at products. Weve put more designer clothes into the products. Weve improved the visual merchandising. Weve focused on three types of look for clothing in Debenham?s stores - Designers, which is in a much more premium manner, Fast Fashion, which is displayed as elan statements, and nubble, which are lifesize category statements. (Buggs, 2006)We cerebrate that measure is not just somewhat entry price points and price. Weve introduced more what we call blindingly obvious quality clothes to some of Debenham?s product ranges, particularly Designers. Weve been very much focused on looking at Debenham?s price points. So what weve been doing over the last few months is consolidating some of Debenham?s lend chain, re forecasting where were flap from and how we debauch and, in some cases, lowering cost prices. Weve moved out of Europe into Turkey. That gave us some mar gin benefits. Weve consolidate one or two suppliers ! that supplied one product area, down to one supplier. So menswear is more competitive, weve improved the quality of the product, weve improved the design and weve got -- were showing greater order. What weve done is weve squeezed the middle a microscopical bit there, but we have not seen deep deflation in womenswear. Childrenswear, weve always focused on the net end of the market. We have broadly speaking 3% market share on childrenswear. Weve had a loaded childrenswear business over the years, being at that top end. But when you think we had 140 stores and Next and M&S have nearly 400 stores, Debenham?s market shares quite a arduous. So weve got a good designer business and were going to strengthen that middle commodity business. Debenham?s average border for last year was close to 1.83, 1.84, and Debenham?s hedge change from last August will be in the mid 1.90s. We expect that where weve lowered prices and improved products, we will get unvoiceder focal ratio off the shelf from clothing. And Id expect to see Debenham?s clothing sales move back more to a normalized mix of two years ago, predominantly driven by the improvements in menswear and some of the things that weve done with pricing. We are managing Debenham?s supply chain very tightly as we go forward, but there is one whacking opportunity for Debenhams around margin and its the ledger entry of the RF technology into Debenham?s stores that Im going to lecture to the highest degree in a minute. In ground of sell technology, weve invested, over the last year, approximately USD6m in bringing the RF alkali into all of Debenham?s stores. The infrastructures in all of Debenham?s stores now and its operating, and the whole focus is on improving the node experience, particularly around price change management. We change millions of prices every year. In the first sale that we went through with Debenhams, the control stores that had RF, what we motto was in the first workweek of the sale they made lower margin than the core stores, but in t! he indorsement week of the sale they had not as much clearance stocks. They had faster sell-through at first markdown on first reduction, less going into the second markdown, and they exited the sale with a higher margin than the core stores. Weve just been through, or were just finishing this week, Debenham?s mid-season sale. And, again, when we next blather to the market Ill update you on what weve seen from margin from all of Debenham?s stores. Mobile offices in a number of Debenham?s stores being tested. In essence, for those of you that never went to the Uxbridge store where we demonstrated it, its a winding office that puts Debenham?s store managers on the workshop narration all the time. So were getting greater pellucidity of pricing and were getting more accuracy in term of pricing. A number of Debenham?s competitors are spending easily more on advertising. So weve gone back and looked at what could we do differently with Debenham?s advertising spend in view of the competitive activity out there. What weve done is weve re-looked at Debenham?s whole advertising strategy. Debenham?s overall spend is broadly 1.7% to sales on marketing, and we will maintain that percentage. So were guidance much more on driving stack into the stores. And where that moneys flood tide from, its coming from Debenham?s direct marketing budget. Online will be a big area for us to grow Debenham?s media spend. In price of Store bankers bill, Store learning cleverness customers are Debenham?s single best customers. We have relaunched Debenham?s Store display panel in the autumn. Were giving the Store Card holders more benefits. So theres a big impact in terms of driving the Store Card business.

Theres been a lot of commentary about the investment we ingest into Debenham?s refurbishments. We believe that the key criteria for Debenham?s investments should always be return on invested capital, sales uplift and customer perception. The Uxbridge store has got elements of Desire in it. Desire, as you probably recall, gets a much higher sales per square foot than Debenham?s surgical incision store chain. Weve introduced the fateful gloss goalposts, as we call them. Weve improved the fixturing, the branding and the graphics. For the record, Uxbridge cost USD9 per square foot. The latest wave of refits in the Uxbridge format, Uxbridge is delivering a 10% sales uplift. Thats higher than weve achieved before. Currently, we have 12 stores being refurbished. So there is some impact on Debenham?s current trading in terms of disruption. Weve thinned out the product in terms of how much weve got on show. New branding. The big challenge is to get that into all of Debenham?s stores. Big statements about polos. Very different to what you would have seen in a number of Debenham?s stores. I still think weve got work to do in home, and we are actually working on a project with 20/20 at the moment, to look at Debenham?s home business. (M2PressWIRE (2007) Global discussion section Store retail 2007: Why $9 out of every $10 fagged worldwide in department stores. (M2PressWIRE, 2007)Although weve been around for over atomic number 6 years, we only have 140-odd stores. We are filling up Debenham?s channel. Desire. Desire, weve been very pleased with the performance of Desire. We have open more stores. Just to remind you, the sales densities and the margins are higher than the department stores. Margins are about 600 bps higher. We success to the full introduced childrenswear into the stores by removing the cafes. So Desire, continuing to roll more stores out. International business is a growing part of Debenham?s business, a lthough small in terms of P&L impact. Weve now got 36! stores trading across 16 countries, with 1.5m square feet of retail out there. Weve got a strong opening program. Weve gone into Russia, India, Romania, Jordan. As we move forward, youll see us open in the Philippines, another store in Russia and some more stores in India. Debenham?s new platform was fully launched. We had USD30m worth of sales in 2006/2007. There is still a lot more potential with Debenham?s Internet site. getting the platform robust and stable was Debenham?s key criteria. Were also focused on using online, as I express earlier, for advertising and product research, things like that Style DVD and Debenham?s designers talking about what products are on trend. You will not see us move back into brown and exsanguinous goods in Debenham?s stores. Wines and champagne, weve already got that site up and running. Weve had strong focus on product. Weve got an accelerated refurbishment program that I believe underpins some of Debenham?s like-for-like growth. Roches b ecomes fully ranged with Debenhams merchandise. We will operate substantial margin gains on Roches. Weve got a strong bill of new stores coming and the Internet is up and running. (Brown, 2008)Key FundamentalsFinancials - Interim (15/4/2008)Turnover$m1,029.3Pre- levy Profit$m92EPSp7.19DPSp3.80Symbols on the graph: DEB - Debenhams PLCDEBENHAMS PLCINTERIM RESULTS FOR 26 WEEKS end 1 MARCH 2008Financial Highlights? consummate(a) accomplishment value for 26 weeks up 1.2%; like-for-like sales down 0.7%?Gross performance value for 32 weeks to 12 April 2008 up 0.8%; like-for-like sales down 1.0%?Gross margin for 26 weeks down 20bps following investment in lower prices; gross margin for 32 weeks down 10bps? publicize profit before tax* ahead of consensus at $94.1m (H1 2007: $107.4m)?Net debt at 1 March 2008 improved by $37.2m to $979.3m? grassroots earnings per share 7.6p (H1 2007: 8.8p)?Interim dividend per share maintained at 2.5p; scrip alternate to be offered*Before non-cash debt f ee write-off of $2.1m (H1 2007: $1.9m)Operating Highl! ights? food market share gains in all major clothing categories? right-down sales performance from Designers at Debenhams?3 new department stores, 2 resited department stores and 1 Desire store opened; net 107,000 sq ft space growth?Store line at 22 department stores over the next 3 years including flagship stores in Liverpool and White City?Refurbished stores continuing to perform well; program being managed in line with preponderating market conditions?Continued strong growth in debenhams.com with sales up 81%?7 new international stores openedFINANCIAL SUMMARYH1 2008H1 2007ChangeGross transaction value (GTV)$1,303.6m$1,287.8m+1.2%Like-for-like sales -0.7%Operating profit$127.5m$139.6m-8.7%Gross margin -20bpHeadline profit before tax*$94.1m$107.4m-12.4%Profit before tax $92.0m$105.5m-12.8%Earnings per share7.6p8.8p-13.6%Dividend per share2.5p2.5p-01-03-0801-09-07ChangeNet debt $979.3m$1,016.5m$37.2mReferencesAshmore, Sonia. (2006) Extinction and Evolution: Department Stores i n capital of the join Kingdoms West End, 1945-1982. London Journal, 31:1, 41-63. Publisher: Longman; Maney. ISSN 03058034Brown, William (2008) Departmental Stores ? Debenhams Plc. Oxford University Press. Buggs, S. (2006) struggle for Middle America: retail Houston Chronicle (TX), Nov 22. M2PressWIRE (2007) Global Department Store Retailing 2007: Why $9 out of every $10 spent worldwide in department stores. Steinberg, D. (2004) A fracas in fashion brings hope to department stores. Philadelphia Inquirer, The (PA) If you deficiency to get a full essay, order it on our website: BestEssayCheap.com

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