Debenhams boss Michael Sharp insisted it would not resort to knee-jerk discounting over Christmas despite the unseasonably warm start to the season.
Sharp, who vowed to reduce the department stores promotions after its margins were hammered last Christmas, said it had tightened up its buying so it did not have to resort to discounting.
Despite the weather impact, Debenhams is holding 5% less stock than last year, even in categories such as knitwear and outerwear, he said. It has also delayed its Autumn Spectacular and its mid-season Sale by two weeks.
Sharp said it would not follow competitors if they decided to slash prices to stimulate sales over the upcoming festive period.
“We’ve got to paddle our own canoe and be more in control of our own destiny,” he said.
Sharp insisted that it does not lead promotions in the sector but admitted: “We’ve been as guilty as others.”
He insisted the move away from discounting was not a short term move but part of building a “long term sustainable future” for Debenhams.
The move has already benefitted the department store’s margins. In its second half, gross margin rose 10 basis points on the back of a 100 basis point slump in the first half.
Sharp said the reduction in promotional events had also improved consumers’ perception of the Debenhams brand.
He said: “Customer perception of Debenhams as a place that’s value for money is improving. That’s driven by the clarity of our promotions.”
Sharp admitted that the warm start to autumn had “not been helpful” but said that the fact that half of its sales were outside of fashion gave it a “degree of resilience”.
Improving its multichannel proposition
Debenhams is as “best prepared as we can be” for Christmas, according to Sharp. The retailer has upped the convenience of its online business, a weakness that hit sales last Christmas, including offering next day click-and-collect and extending the cut off for next day delivery until 10pm.
Sharp said convenience is poised to be an important influence on buying decisions for years to come.
“No-one has any time and technology is an enabler of improving convenience. Customers are demanding convenience and ease we need to make it convenient,” he said.
Sharp said research showed that customers did not think that Debenhams had the same swift delivery options that its rivals had so will promote its delivery options in all of its marketing materials ahead of Christmas.
Now that Debenhams had “caught up” with its rivals in terms of fulfillment, it would look to steal a march next year, he said.
Black Friday and less predictable gifts
The department store is also set to ramp up its gifting offer and push Black Friday promotions ahead of Christmas.
Sharp believes Black Friday will become an increasingly important date in the retail calendar.“We weresurprised by how big it was [last year]. We’re better organised about it this year,” he said.
Debenhams is also seeking to become a “destination for gifting” and is growing the category “Christmas will be characterised by a growth in gifting. People are looking for more original gifting and less predictability,” said Sharp.
The retailer will extend its gifting categories into a wider number of stores and will stock more toys.