Debenhams chief talks up recovery prospects, some stores to shrink
today Jun 10, 2019
Debenhams chairman Terry Duddy was bullish on the chances of the department store chain’s recovery being a success in an interview at the weekend with the recently-appointed exec also saying that some stores may be downsized.
The company, which had already planned to close 50+ underperforming shops, is in talks with landlords about the space reduction plan that could affect around 30 sites.
The closure programme would leave the company trading from around 100 units and if 30 of those see size cut-backs, it would mean the Debenhams chain would be very different in a year or so from now compared to the giant business that limped so publicly towards its administration filing not so many weeks ago.
Duddy told the Mail on Sunday that “of the 100 stores, we will be having conversations about what would be the right size for that location. In some cases we need to be on three floors rather than four or five.”
And he said an “ideal” size would be around 100,000 sq ft depending on the size of the town it was in, compared to many current sites being double that size.
Duddy also said it would take two years to complete the next phase of the recovery plan. That will be time in which industry watchers will be closely watching the chain for any sign that the recovery is faltering. However, because it’s no longer a listed company, it won’t be in the spotlight in quite the way that it was until recently.
The company is currently on a much more sound footing, its backers having pledged £200 million of working capital and its landlords having agreed rent reductions and lease cancellations. Duddy called the situation left by the firm’s previous private equity owners “dire”, with onerous leases that left it drowning under a tsunami of unmanageable rent deals.
And he said the company will this autumn launch a new womenswear range, a project started under now-departed CEO Sergio Bucher. There are no details on this at present but rival John Lewis has benefited enormously from adding new own-brands to its women’s fashion offer and Debenhams is hoping it can do likewise.
The company is adding more newness generally in fashion (including menswear) and promising it will meet shopper demand for more regular refreshes of what’s on the shop floor.
Duddy also talked up the firm’s beauty ops the he said bring in £2.3 billion annually from 19 million shoppers and make up 23% of the firm’s total sales, and he added that the company must boost its online revenues beyond the current £530 million.
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