Debenhams’ Christmas marketing strategy fails to halt fall in sales

Debenhams has reported a 0.8 per cent fall in its first quarter sales despite a strong Christmas trading period and marketing activity focussed on gifting rather than price promotions.

The department store said like-for-like sales for the 19 weeks to 10 January fell by 0.8 per cent, missing analyst expectations of a one per cent rise. Debenhams said the dip was due to the unseasonably warm weather affecting clothing sales – a trend that was seen by much of the apparel industry.

The retailer experienced an upbeat Christmas sales period, thanks to a focus on gifting rather than heavy promotional activity, which previously forced Debenhams to issue a profit warning following Christmas 2013, and saw chief financial officer Simon Herrick step down. Sales in the seven weeks to 10 January sales increased by 2.4 per cent and online sales increased by 11.7 per cent.

Debenhams reported a strong performance on Black Friday which saw online orders on the day soar 125 per cent.

Michael Sharp, chief executive of Debenhams, said: "I am pleased with our performance in the critical Christmas trading weeks, driven by our strength in a diverse range of product categories and a strong marketing campaign focussed on gifting.

“Our performance steadily improved following the well documented challenges in the clothing market in the autumn. We now have a competitive online proposition with next day delivery to home and next day click and collect, which customers took full advantage of and which performed well over Christmas. I would like to thank the whole Debenhams team for their tremendous efforts in delivering this performance.”

Overall, sales from mobile channels increased to represent 44 per cent of total online sales.

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