Retail news round-up on January 2, 2014: John Lewis plans to double store estate in next decade, Debenhams chief financial officer resigns, Osborne Stationers sells two stores to Paperweight, Asda kicks off discounting campaign and Ikea aims to double market share in Germany.
John Lewis prepares to almost double in size over next decade
John Lewis is gearing up to nearly double in size over the next ten years as well as set up a French website, managing director Andy Street spoke in an interview with The Telegraph. The moves form a part of ambitious growth plans for the UK and overseas. According to Street, the department store chain is expected to open a store outside of the UK within the next decade.
By 2023, Street said that it is likely to have 65 outlets, with annual revenues increasing to £7bn. Street is readying to boost the retailer’s international strategy by launching a French website. Street added John Lewis might also consider expanding the brand into health-related products.
The plans come as John Lewis recorded a 7.2% jump in Christmas sales for the five weeks to December 28, driven by strong demand for items from tablet PCs to coffee machines, Reuters reported. The UK department stores group’s sales from online stores and outlets increased to £734m in the five weeks to December 28, including its biggest-ever taking of £35.6 million on day one of its in-store clearance sale on December 27. The improvement comes in spite of unusually stormy weather in Britain in the run-up to Christmas and a still-cautious approach by many shoppers. Group like-for-like sales increased 6.9%.
Debenhams chief financial officer Simon Herrick resigns
Debenhams chief financial officer and director Simon Herrick has resigned and will leave the retailer on February 7. The department store retailer is seeking a replacement. Meanwhile, Debenhams director of finance Neil Kennedy will take up the role of acting chief financial officer on an interim basis. Debenhams chief executive Michael Sharp thanked Herrick for his “hard work and contribution over the past two years”. The resignation comes after Debenhams posted a profit warning this week after Christmas shoppers shunned the retailer.
Osborne Stationers sells two stores to Paperweight
Osborne Stationers has saved ten of the 140 jobs by selling two of its 20 stores to Paperweight, The Telegraph reported. The outlets purchased by the company controlled by the Birmingham-based businessman John Waits for an undisclosed sum are based at Oadby in Lincolnshire and Newark in Nottinghamshire. Discussions are underway about selling a further store, understood to be in the Birmingham area, which could save an additional five jobs. Further store closures are expected in the New Year. Osorne Stationers has continued to trade since calling in administrators on December 2, after a failed restructuring programme following two years of continued losses.
Asda kicks off biggest-ever discounting campaign
Asda has started its biggest-ever discounting campaign with a pledge to cut £50m from the cost of bread, butter and other essentials in the first three months of the year, The Times reported. This is set to escalate a supermarket price war.
Asda’s chief merchandising officer for food Barry Williams claimed that the company was “even making the Poundshop and Aldi look expensive” with its £1bn, five-year campaign which it revealed in November. He said that Asda “can guarantee to be 10% cheaper than the competition”. Asda plans to invest £200m this year to cut the cost of essential groceries. It said that it would lower the cost of its largest-selling items, bread, fruit and vegetables, meat, fish, cereals, nappies and toiletries.
Ikea expects to nearly double market share in Germany
World’s biggest furniture retailer Ikea Group is eyeing a market share of 25% in Germany in the next eight to 10 years with new outlets and increasing online sales, Handelsblatt daily quoted the head of its German business Peter Betzel saying in an excerpt of an article. Betzel said he sees potential for 20 to 25 more shops in Germany, in addition to 46 existing ones.