Debenhams gains market share despite €36m sales slide amid snow

DEPARTMENT store Debenhams lost around €36 million in sales because of the snowy conditions.

The company said like-for-like sales in the 19 weeks to January 8 fell by between 2.5% and 3% due to the snow, leaving same-store sales across the period 1.3% lower compared with a year earlier.

Chief executive Rob Templeman said he was pleased with the festive performance, especially given that the company gained market share, notably in men’s and children’s clothing. He expects the company to make progress in the coming months, but is cautious about the strength of consumer confidence.

“What we’ve got to see is how consumer sentiment unfolds over the next six to eight weeks, then we’ll be in a better position to talk about how we think the future lies,” he said.

Last year, Debenhams said a restructuring programme of its Irish operations cost it up to €11.3m. It said this restructuring of the business in Ireland will “ensure that the business has the flexible and right-sized workforce that it needs for the future”.

Debenhams entered the Irish market by acquiring Roches Stores in 2006 and has 10 stores in the Republic. It has 167 stores across Britain, Ireland and Denmark and has stripped back concession space in recent months to focus on brands, including designer collections from Henry Holland and Ben de Lisi.

The British operator anticipates that terminal stock left over at the end of February will be at an all-time low level. It said gross transaction value rose 4.2% over the 19 weeks, with gross margin ahead of the previous year.

Retail analyst at Singer Capital Markets, Matthew McEachran said the underlying performance of the business and strategic changes means Debenhams should be able to offset much of the damage over the remaining 33 weeks of its financial year.

“In light of the snow impact, this is a decent performance and... we expect performance on a cumulative basis to be gradually clawed back, albeit probably not entirely,” he said.

Arden Partners analyst Nick Bubb said Debenhams’ Christmas outcome looked unimpressive compared with the much stronger figures reported by rival John Lewis.

Several British retailers, including Next, HMV and Mothercare, last week blamed bad weather for big falls in Christmas sales.

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