Debenhams turns to web to lift sales after profit warning

Debenhams plans to develop its website into a major outlet in its battle against falling sales, the retailer announced as it posted a profit warning with its half yearly results.

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Debenhams plans to develop its website into a major outlet in its battle against falling sales, the retailer announced as it posted a profit warning with its half yearly results.

The department store group issued its third profit warning in the past five months after like-for-like sales dropped 6.9% between 4 March and mid-April. Debenhams announced a 34.4% rise in first-half profits and a 5.8% rise in sales, but shares fell in response to news that the results had failed to meet expectations.

But the group has high hopes for its revamped website, launched in December. In a statement posted with the half yearly results, the retailer said: “It has the capacity to manage the significant demand for our products in this rapidly growing market.”

There had been “a significant increase” in online orders and in average order value since the website’s launch. “Our objective is to build on this new platform and develop the internet into one of our largest stores,” the company said.

The new site includes enhanced navigation and search features.
In another IT initiative aimed at boosting sales, Debenhams installed new business intelligence systems in July last year. The system uses a data conductor from Sunopsis to load trading data into its an enterprise-class Netezza performance server.

Chief Executive Rob Templeman said sales for the half-year had been “below our expectations”, despite a particularly strong comparative period last year. “Any shortfall in sales will inevitably impact on gross margins and we are therefore taking actions to mitigate its effect on profits in the second half,” he added.

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