20495_Debenhams_AR_151104

Our stores remain
central to our customer
proposition. We have
modern stores in prime
locations and one in four
of the UK population visits Debenhams
every year. Our destination departments
including beauty, gift and occasionwear
remain central to our customer
proposition. And this autumn we are
opening five new stores, in Rugby,
Wandsworth, Beverley, Bradford
and Newport, taking our UK chain
to 166 stores. The shift in the UK retail
marketplace towards online shopping
has presented us with both challenges
and opportunities. We have challenged
our store teams to identify inefficient
space in our existing stores and we have
investigated different ways to achieve
a better return on this footage, which
represents just under 10% of our
total UK footage at approximately
1 million sq ft.
We asked our customers what they
would like to buy from Debenhams that
we did not already sell. We looked at
service offers which are complementary
to our existing mix and cannot easily
be replicated online. And we examined
our own brands to see where there was
unsatisfied demand. For example, we
saw opportunity in casualwear for
35-50 year old customers.
The aim of this project is to increase
profit density in the identified footage
and dwell time in our stores and results
so far have been encouraging.
Our findings from talking to our
customers clearly showed what other
product areas they would like to buy
from us. This led us to establish new
concession partnerships with Sports
Direct, Monsoon Kids, Danish group
Bestseller – for their younger fashion
brands Only and Jack & Jones – and
BHS Lighting, among others. These all
offer product that is complementary
to our existing brands.
We have also added some exciting new
branded food service offers with Costa
Coffee, Patisserie Valerie, Joe & The
Juice, Insomnia, Chi Kitchen and Ed’s
Easy Diner. Customers who use one
of our in-store dining options spend
significantly more time and money in
Debenhams than those who do not.
By the end of the financial year, we had
added new offers into 350,000 sq ft,
35% of the space we identified as part
of this programme. Initial results have
been sufficiently encouraging to move
to roll-out from trial stage with a
number of our new partners.
Outlook in FY2016
We continue to explore new product
categories, in order to offer more
choice to customers through products
and services that are complementary
to our existing offer. With encouraging
progress to date in improving profit
densities, we are identifying
opportunities to apply the lessons
learned to our more productive space
and to our new stores as well.
Strategic report 2-39
New and extended services,
brands and concession trials
We rolled out in-store service
counters to support our click & collect
proposition. With almost 170 stores in
the UK this is a convenient option for our
customers and our preferred channel
for online deliveries. One in ten click
& collect customers spend more than
£20 while they are in store. We have
both extended and added to our
beauty brands, building on our strength
in make-up in particular, rolling out
more counters and services such as
brow bars.
Some of our newer brand launches,
such as Principles casualwear and
Hammond & Co. by Patrick Grant, have
been particularly successful and rolled
out to more stores. Our customers
are always looking for newness, so we
examined the opportunity for our latest
Designer launches: Giles Deacon for
Edition and Nine by Savannah Miller,
which addresses the casualwear
opportunity, and have been more
confident in store ranging for their
initial season.
For example, we had originally planned
to open our Bradford store with just
one dining offer, but as a result of the
feedback from customers and the
findings of our space programme, the
store will launch with three – giving our
customers a choice of casual dining
options in the city centre.
By April 2016, as planned, half of
the 1 million sq ft under the space
optimisation programme will have
been reallocated through our various
initiatives. The changing nature of the
retail marketplace is creating a variety
of opportunities with new potential
partners and we remain extremely
confident of reallocting the balance
of the identified space.
New food service
offers include Chi
Kitchen and Patisserie
Valerie. Our new
Rugby store opened
in September.
Space optimisation
programme
350k sq ft
New UK stores by Christmas
5
Debenhams plc Annual Report & Accounts 2015
15