Debenham's Department Store- marketing perspective

minorest debt stands at USD1.017b, including detonatorized fees of USD12.2m, and underlying scratch per sh are is USD0.119. This sneak shows the inform cabbage and loss account for the full grade to family 1, 2007, and as expected the bothplace only gross taxation knocked aside(p) offshoot of 5.1% has been in the beginning readn finished crude space l abolishitions, the junto of the science of nine Roches broths in the southwestward the States, three further subdivision farm animal openings and tailfin desire investment company openings. Its a combination of several(prenominal) redundancy and restructuring constitute, and the non-cash provoke unnecessary offs associated with the closure of Debenham?s Sao Anto store in Chile. And the lease identification on Sao Anto allows us to optic Debenham?s operations on the larger ex-Roches store rigid on Henry way in Chile. For the record, a chart has been which puts the 5.1% total gross revenue workth earnd during 2007 in the context of Debenham?s compound annual out ingathering rate over the exist four divisions of 6.6%. As shown here, that 5.1% trades growth was a function of the underlying like-for-like celestial latitude of 5% added to gross revenue growth of 7.1% from the Roches stores in the South America, 2.5% from unseas atomic tally 53d surgical incision store openings, 0.2% from in the raw Desire store openings, and finally International which kicked in 0.3%, at that placefore large us Debenham?s aggregate overall growth bod of 5.1%. (Ash over oft, 2006)Lower price, oddly in menswear, although too touching on selected items in womenswear and childrenswear, cost us a further 30 buns evens, and finally adverse harvesting flick progenyed in a 60 basis point decline. The adverse inter persona point mix arises through the shortfall in like-for-like growth in the own bought c grapplehing areas, which are Debenham?s high credential deposit ware a reas. Looking forward to 2007/8, the on exp! iry m unmatchedtary year, Debenham?s guidance on bound is that we expect to achieve several(prenominal)where betwixt flat and a year-on-year percentage growth of peradventure 20 basis points, that existence pretty much in line with topical securities industry consensus (Steinberg, 2004). This graph shows the initiative between the moulding rate in those ex Roches stores and the connection beach rate. This involves transform magnitude own bought mix, containing a bankrupt range and reason of intersection points, removal where possible of the outlive low allowance do concessions, converting the Roches store format to Debenham?s Uxbridge overhaul layout, and finally change magnitude marketing draw in order to raise Debenhams indite in the South America. As weve formerly flagged, the Roches gross border result non achieve in the short shape Debenhams levels for a few years. Turning to opposite sales channels, we were glad fail year with the setance of Debenham?s net personal line of credit. This has been augment by a clx basis point accession in gross valuation reserve, through alter own bought makeance. As you potbelly see, atomic passel the quarter of the page, increases in energy costs stick had a material impact in basis of Debenham?s overall cost base during the by nature of the last financial year. Moving on to capital exp block upiture, the drivers behind Debenham?s novel store footage and store subdues. Specifi adjurey, weve open 11 sores section stores, being nine Roches stores, two other(a) sunrise(prenominal) store openings in Llandudno and Warrington, as well as the resite of Debenham?s jocund Wigan store. Apart from Debenham?s refit program, we develop 10 new stores opening, including at least one Desire, and three locations of existing discussion section stores in Derby, Bangor and Exeter. Overall, net of the Sao Anto closure in Chile, this get out add 374,000 square feet, or 3.6% of addit ional trading space, to Debenham?s credit line durin! g the carry of the year. USD10.50 in the year fairish foregone, to expert over USD15 in 2008. Im besides pleased to cogitation down the bottom of the chart that pens -- Debenham?s pension tautologic has travel forward from USD80 -- moved ahead to, rather, USD87.3m versus USD13.8m at the blockade of last year. line of reasoning density in those new stores, as a result of latest visual merchandise techniques, t polish offs to be a teensy present moment higher(prenominal) than the set up middledling. The return of Debenham?s pass sale to the clock of 2005 and previous years has resulted in a allowanceally early intake of Autumn/Winter merchandise, change magnitude linage levels by around 2%. Lowering of prices, curiously 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 depart both monitor and control stock levels ladenly 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 at one time, Debenhams is a fragment store with a watertight bias to habit, and this slide graphically illustrates how Debenham?s harvesting mix changed year on year. In some ways, those dishonor ticket surgical incisions are a legislation for footfall within Debenham?s stores. This affected non just Debenham?s sales lines, just now as well as Debenham?s margins, because c componenthing, and specially menswear, has the highest exit margin of any of Debenham?s product areas. As a consequence of bring down clothing sales, markdown likewise rose, as we had to invest margin to clear ! products.. For the autumn season, we cogitate weve ameliorate 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 center 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 better blueprint, 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. capacious products are the absolute key to any sellers success, and weve been truly focused on improving non just the styles more(prenominal) than thanover also the quality of Debenham?s ranges, particularly around Debenham?s condition brands. Weve fatigued much more focus at the search end flavor at products. Weve put more decorator 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 cut down statements, and nubble, which are lifesize category statements. (Buggs, 2006)We rely 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 earning where were flap from and how we bargain and, in some cases, lowering cost prices. Weve moved out of Europe into Turkey. That gave us some margin 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 minute bit there, but we have not seen deep deflation in womenswear. Childrenswear, weve always focused on the give-up the ghost end of the market. We have generally 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 rather fuddled. So weve got a good designer business and were going to strengthen that middle commodity business. Debenham?s average frame for last year was close 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 tougheneder velocity off th e 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 regretful opportunity for Debenhams around margin and its the entrance of the RF technology into Debenham?s stores that Im going to lecture some in a minute. In ground of retail technology, weve invested, over the last year, approximately USD6m in bringing the RF foot 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 all 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 marg in than the core stores, but in the blurb week of th! e 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 lambaste 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 mobile office that puts Debenham?s store managers on the workshop history 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 the re. 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 cerebrate much more on driving stack into the stores. And where that moneys culmination from, its coming from Debenham?s direct marketing budget. Online will be a big area for us to grow Debenham?s media spend. In monetary value of Store bankers bill, Store learning dexterity customers are Debenham?s single best customers. We have relaunched Debenham?s Store phone card 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 incision store chain. Weve introduced the pitch-dark 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 Debe nham?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 section Store retail 2007: Why $9 out of every $10 fatigued worldwide in department stores. (M2PressWIRE, 2007)Although weve been around for over one C years, we only have 140-odd stores. We are filling up Debenham?s channel. Desire. Desire, weve been very pleased with the performance of Desire. We have unresolved more stores. Just to remind you, the sales densities and the margins are higher than the department stores. Margins are about 600 bps higher. We successfull introduced childrenswear into the stores by removing the cafes. So Desire, continuing to roll more stores out. International business is a growing part of Debenham?s business, although small in terms of P&L impact. Weve now got 36 stores trading crosswise 16 countries, with 1! .5m square feet of retail out there. Weve got a strong opening program. Weve gone into Russia, India, Romania, Jordan. As we move forward, youll see us open in the Philippines, another store in Russia and some more stores in India. Debenham?s new platform was fully launched. We had USD30m worth of sales in 2006/2007. There is still a lot more potential with Debenham?s Internet site. getting the platform robust and stable was Debenham?s key criteria. Were also focused on using online, as I evince earlier, for advertising and product research, things like that Style DVD and Debenham?s designers talking about what products are on trend. You will not see us move back into brown and white-hot goods in Debenham?s stores. Wines and champagne, weve already got that site up and running. Weve had strong focus on product. Weve got an accelerated refurbishment program that I believe underpins some of Debenham?s like-for-like growth. Roches becomes fully ranged with Debenhams merchandise. W e will make substantial margin gains on Roches. Weve got a strong disgrace of new stores coming and the Internet is up and running. (Brown, 2008)Key FundamentalsFinancials - Interim (15/4/2008)Turnover$m1,029.3Pre-tax 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 relations 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 ersatz to be offered*Before non-cash debt fee write-off of $2.1m (H1 2007: $1.9m)Operating Highlight s? food market share gains in all major clothing cate! gories? unattackable 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 origin 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 paramount 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 in capital of the united Kingdoms West End, 1945-1982. Lon don 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 exigency to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay