Debenhams to refit stores in profit drive

Stores including Manchester and Glasgow have been earmarked for refits to “bring them up to Westfield standard”, said Debenhams chief executive Rob Templeman.

Own-brands such as Red Herring and Jeff Banks will also be upgraded with complete new shopfits. The retailer is poised to relaunch the Principles brand, for which it acquired the rights last year, and introduce H by Henry Holland over the next couple of weeks.

Principles has been overhauled by Ben de Lisi to provide a “designer twist” and Templeman said it would be Debenhams’ biggest launch of the year.

He was confident it would do well, saying: “It’s a well-known brand with fantastic customer loyalty.” At the height of Principles’ original success, he said it generated sales of about £120m a year and Debenhams spoke for half that total.

Debenhams has increasingly been concentrating on its own labels and reducing concession space, which meant like-for-like growth in the 18 weeks to January 2 was restricted to 0.1% but margins have risen “significantly”. Gross transaction value was up 1.8% in the period. “The key thing is to focus on profitability, not just sales,” said Templeman.

Debenhams also said “progress continues to be made in terms of market share, particularly in menswear, kidswear and home”.

Singer analyst Matthew McEach-ran said Debenhams’ update was encouraging. “Refits have been generating an uplift of about 5% versus the control stores and this will start to reflect in overall like-for-likes over the next 12 months,” he said.

Ambrian analyst Philip Dorgan said: “Notwithstanding short-term concerns about the economy, we think that historic margins are attainable.”

➤ House of Fraser achieved a 7.1% rise in like-for-likes in the eight weeks to January 2. Chief executive John King said: “Our results are a demonstration that our customers continue to respond positively to the changes we have been making throughout the business.”