Online sales not enough to help M&S, Debenhams and Next

Internet channels did little to ease the difficulties of the high street brands as Next and Debenhams both announced falling sales at the end of 2008 and Marks & Spencer (M&S) slashes 1250 jobs.

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Internet channels did little to ease the difficulties of the high street brands as Next and Debenhams both announced falling sales at the end of 2008 and Marks & Spencer (M&S) slashes jobs.

M&S is axing up to 1,230 jobs and shutting 27 stores after suffering its worst sales performance for a decade.

In a trading statement, the high street retailer said it would 25 "underperforming" Simply Food outlets, out of a total of 350, and two main stores. This will cost the jobs of up to 780 staff. A further 450 jobs will be cut at its head office, representing around 15 percent of its head office and support roles headcount. M&S employs around 70,000 people worldwide.

Clothing and home wares retailer Next said its sales had dropped seven percent in the six months leading to Christmas Eve 2008, whilst department store chain Debenhams reported a sales drop in the last 12 weeks of the year of 3.3 percent. Debenhams said the decrease in sales was an improvement from a drop of 4.2 per cent it recorded in the first six months of 2008. Debenhams, which continued to open stores last year, said the decrease in debt was down to “continuing tight management of costs and stocks”.

“Our trading strategy for the first 18 weeks of the year has resulted in further market share gains and a creditable sales performance given the extremely difficult and volatile conditions seen across the high street,” said Rob Templeman, Debenhams chief executive.

Debenhams reported that its online business Debenhams Direct has increased visitors by 39.2 percent and sales by 37.4 per cent.

Marks & Spencer also reported "record traffic" in its online business, driving sales up 29 percent. But its UK sales were down 3.4 percent overall.

Marks & Spencer updated its web presence last July, told shareholders it had reduced like-for-like IT running costs by 13.5 percent in 2007. M&S has recently completed a major RFID integration to cover its 30 million products.

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