Debenhams has suffered a fall in full-year profits but boss Sergio Bucher is pleased with the progress of his new strategy to reinvigorate the business.
The department store group reported a 44% slump in full-year pre-tax profit to £59m, while gross transaction value rose 2% to £2.95bn.
On an underlying basis, profit was down 16.6% to £95.2m in the year to September 2.
Bucher, who joined Debenhams a year ago, said that changes being made as part of his Debenhams Redesigned strategy showed early signs of bearing fruit.
New format trials, piloted so far in Stevenage and Wolverhampton, “are delivering very positive initial results” and strategic partnerships, such as an investment in beauty specialist Blow, are to provide opportunities to drive growth and build a services offer that complements the traditional business.
Bucher said: “We are making good progress with implementing our new strategy, Debenhams Redesigned, and are encouraged by the results from our initial trials, as well as the number of exciting new partners who want to work with us.
“There is a lot to do but I am delighted with the enthusiasm and flair shown by my colleagues as we embark on this journey.
“The environment remains uncertain and we face tough comparatives over the key Christmas weeks. However, we are well prepared for peak trading and the early signs from our activity to date confirm that we are moving in the right direction towards a successful and profitable future for Debenhams.”
Food and beauty were Debenhams’ star categories over the year – sales were up 8% and 5% respectively. Clothing was down 0.5%.
Digital sales advanced 12.7% and mobile orders climbed 57% in the UK.
Group gross margin was down by 30bps, as expected, but full-price sales rose 1.7%.
The retailer said it is to shut its branches in Eltham and Farnborough early next year. The decision followed a store review which identified 10 locations as being “at risk of becoming unprofitable”.