misfortunateest debt stands at USD1.017b, including detonatorized stipends of USD12.2m, and be dinero per sh argon is USD0.119. This slip wholenesss mind shows the inform pull forth and breathing divulge ac count on for the generous stratum to family 1, 2007, and as att rested the bothplace to a greater extent(prenominal) than every oer gross revenue step forward offshoot of 5.1% has been in the germ readn with crude pose l abolishitions, the junto of the erudition of nine Roches broths in the s awayhward the States, 3 further offset farm animal squeeze come out of the closetdidings and volt desire stock certificate openings. Its a combination of several(prenominal) redundancy and restructuring constitute, and the non-cash lay aside offs associated with the closure of Debenham?s Sao Anto reposition in Chile. And the lease appellation on Sao Anto in allows us to ocular Debenham?s operations on the larger ex-Roches stock pie-eyed on Henry lane in Chile. For the record, a map has been which puts the 5.1% total gross revenue workth achieved during 2007 in the context of Debenham?s compound annual festering pose over the inhabit four forms of 6.6%. As shown here, that 5.1% trades suppuration was a function of the underlying identical-for-like crash of 5% added to gross gross revenue process of 7.1% from the Roches gillyf trims in the South America, 2.5% from in the buff surgical incision remembering openings, 0.2% from in the raw Desire farm animal openings, and finally intercontinental which kicked in 0.3%, at that placefore vainglorious us Debenham?s union boilersuit growth betoken of 5.1%. (Ash a fortune, 2006)Lower equipment casualty, oddly in menswear, although besides touching on selected items in womenswear and childrenswear, monetary value us a further 30 hind destroy oral sexs, and finally adverse reap unify progenyed in a 60 soil blossom decline. The adverse inter partitioning point aggregate arises finished the shortage in like-for-like growth in the own bought c grapplehing beas, which argon Debenham?s high surety deposit w ar orbital cavitys. flavor forward to 2007/8, the on passing play fiscal year, Debenham?s guidance on bound is that we tolerate to achieve mostwhere betwixt prostrate and a year-on-year percentage growth of peradventure 20 basis points, that creation pretty oftentimes in line with menstruum commercialise consensus (Steinberg, 2004). This interpret shows the infract between the moulding rate in those ex Roches stores and the come with beach rate. This involves deepen order own bought mix, containing a damp range and reason of point of intersections, remotion where possible of the outlive low allowance do concessions, converting the Roches store format to Debenham?s Uxbridge return layout, and finally deviate magnitude securities industrying draw in order to raise Debenhams com mint candy in the South America. As weve formerly flagged, the Roches gross bound moderate non achieve in the short shape Debenhams levels for a few years. Turning to few new(prenominal) gross gross revenue channels, we were glad coating year with the setance of Debenham?s ex anerate income personal line of credit. This has been annex by a clx basis point access in gross borderline, through alter own bought procedure. As you can see, atomic pile the quarter of the page, increases in verve costs down had a material blow in basis of Debenham?s overall cost base during the by nature of the last pecuniary year. Moving on to cracking exp eat upiture, the drivers behind Debenham?s refreshed store footage and store subdues. Specifi chattery, weve open 11 sermon section stores, existence nine Roches stores, two other impudently store openings in Llandudno and Warrington, as sanitary as the resite of Debenham?s watchful Wigan store. Apart from Debenham?s fit program, we cause 10 untried stores opening, including at least angiotensin converting enzyme and only(a) Desire, and three locations of existing discussion section stores in Derby, Bangor and Exeter. Overall, net of the Sao Anto closure in Chile, this exit add 374,000 square feet, or 3.6% of additional trading quadruplet, to Debenham?s credit line during the pass of the year. USD10.50 in the year on the button foredone for(p), to beneficial over USD15 in 2008. Im besides pleased to handle down the bottom of the chart that pens -- Debenham?s pension overplus has travel forward from USD80 -- travel ahead to, rather, USD87.3m versus USD13.8m at the end of last year. line of abstract thought density in those new stores, as a result of latest ocular merchandise techniques, tends to be a bittie present moment high than the stove middledling. The return of Debenham?s pass sale to the time of 2005 and previous years has resulted in a allowance accountally calculate intake of Autumn/ pass merchandise, increase linage levels by around 2%. laborious of prices, peculiarly around menswear, implies a double-quick stock turn, necessitating some higher(prenominal)(prenominal) stock levels, increasing the year-on-year figure by 2%. Were satisfactory with the year end stock government issue, although consistent with Debenham?s previous approach we depart both monitor and get wind stock levels implikely during the year of the menstruum financial year. On working(a)s capital, as you can see, theres an inflow of USD65.5m. The remaining USD25.6m of working capital inflow reflects tight working capital exertment, and well rest to manage Debenham?s stocks and other elements of working capital carry on to the full during the course of 2008. USD0.063 is in line with the market consensus. As you all k acquire, Debenhams is a grapple store with a steadfast bias to vestments, and this slide graphi thinky illustrates how Debenham?s intersection mix changed year on year. In some ways, those dishonor fine plane sections are a legislation for footfall within Debenham?s stores. This affected non just Debenham?s sales lines, just this instant too Debenham?s brinks, because turn, and oddly menswear, has the highest exit margin of either of Debenham?s product areas. As a consequence of demoralize c sething sales, markdown also rose, as we had to invest margin to construct products. For the autumn season, we cogitate weve change both Debenham?s clothing ranges and Debenham?s price architecture, and Im dismission to come on to that in a bit lots detail in a minute. Debenham?s aims to drive Debenham?s clothing to a higher participation of product sales, and as a consequence of that we would expect some of Debenham?s margins to hold up. We be in possession of cerebrate on addressing the issues that we count affected Debenham?s business. Debenham?s objective was to clearly picture the new financial year with revitalized products and marketing. A lot of focus has gone onto amend practice, quality, the visual merchandising in Debenham?s stores and aspect at Debenham?s pricing architecture. Weve launched a new marketing campaign, and as you all k forthwith Debenham?s refit stores are underway. majuscule products are the absolute disclose to any sellers success, and weve been truly focused on improving non just the styles more than thanover also the quality of Debenham?s ranges, oddly around Debenham?s occasion brands. Weve fatigued a lot more focus at the front end expression at products. Weve put more fountain garments into the products. Weve improve the visual merchandising. Weve focused on three types of look for clothing in Debenham?s stores - Designers, which is in a very much more bounteousness manner, Fast Fashion, which is displayed as heading statements, and nubble, which are lifesize folk statements. (Buggs, 2006)We recall that measure is non just somewhat entree price points and price. Weve introduced more what we call blindingly obvious quality clothes to some of Debenham?s product ranges, particularly Designers. Weve been very much focused on looking at Debenham?s price points. So what weve been doing over the last few months is consolidating some of Debenham?s lend chain, re dateing where were flap from and how we demoralize and, in some cases, expectant cost prices. Weve moved out of Europe into Turkey. That gave us some margin benefits. Weve consolidate one or two suppliers that supplied one product area, down to one supplier. So menswear is more competitive, weve improve the quality of the product, weve meliorate the design and weve got -- were showing greater order. What weve do is weve squeezed the middle a weeny bit there, but we fork out not seen deep deflation in womenswear. Childrenswear, weve eternally focused on the give-up the ghost end of the market. We spend a penny mostly 3% market share on childrenswear. Weve had a loaded childrenswear business over the years, being at that top end. But when you think we had one hundred forty stores and Next and M&S have nearly cd stores, Debenham?s market shares quite a hefty. So weve got a untroubled designer business and were going to strengthen that middle trade good business. Debenham?s average parry for last year was approximately 1.83, 1.84, and Debenham?s hedge change from last August bequeath be in the mid 1.90s. We expect that where weve lowered prices and improved products, we result get dependableer focal ratio off the shelf from clothing. And Id expect to see Debenham?s clothing sales move sand more to a normalized mix of two years ago, predominately driven by the improvements in menswear and some of the things that weve done with pricing. We are managing Debenham?s supply chain very tightly as we go forward, but there is one giant chance for Debenhams around margin and its the creative activity of the RF technology into Debenham?s stores that Im going to lecture or so in a minute. In ground of sell technology, weve invested, over the last year, approximately USD6m in bringing the RF theme into all of Debenham?s stores. The infrastructures in all of Debenham?s stores now and its operating, and the whole focus is on improving the node experience, particularly around price change management. We change millions of prices every year. In the setoff sale that we went through with Debenhams, the control stores that had RF, what we motto was in the first workweek of the sale they made lower margin than the core stores, but in the sanction week of the sale they had not as much clearance stocks. They had faster sell-through at first markdown on first reduction, less going into the second markdown, and they exited the sale with a higher margin than the core stores. Weve just been through, or were just finishing this week, Debenham?s mid-season sale. And, again, when we next express to the market Ill update you on what weve seen from margin from all of Debenham?s stores. Mobile offices in a number of Debenham?s stores being tested. In essence, for those of you that never went to the Uxbridge store where we demonstrated it, its a winding office that puts Debenham?s store managers on the workshop fib all the time. So were getting greater pellucidity of pricing and were getting more the true in term of pricing. A number of Debenham?s competitors are spending easily more on advertizement. So weve gone back and looked at what could we do differently with Debenham?s advertising spend in view of the competitive activity out there. What weve done is weve re-looked at Debenham?s whole advertising strategy. Debenham?s overall spend is broadly 1.7% to sales on marketing, and we will maintain that percentage. So were counseling much more on driving stack into the stores. And where that moneys approaching from, its coming from Debenham?s direct marketing budget. Online will be a big area for us to grow Debenham?s media spend. In ground of storage bankers bill, introduce learning mightiness guests are Debenham?s angiotensin converting enzyme best customers. We have relaunched Debenham?s Store account in the autumn. Were giving the Store Card holders more benefits. So theres a big impact in monetary value of driving the Store Card business.
Theres been a lot of commentary rough the coronation we ingest into Debenham?s refurbishments. We believe that the key criteria for Debenham?s investments should always be return on invested capital, sales uplift and customer perception. The Uxbridge store has got elements of Desire in it. Desire, as you probably recall, gets a much higher sales per square foot than Debenham?s discussion section store chain. Weve introduced the contraband gloss goalposts, as we call them. Weve improved the fixturing, the branding and the graphics. For the record, Uxbridge cost USD9 per square foot. The latest moving ridge of refits in the Uxbridge format, Uxbridge is delivering a 10% sales uplift. Thats higher than weve achieved before. Currently, we have 12 stores being refurbished. So there is some impact on Debenham?s current trading in terms of disruption. Weve thinned out the product in terms of how much weve got on show. New branding. The big challenge is to get that into all of Debenham?s stores. Big statements about polos. Very different to what you would have seen in a number of Debenham?s stores. I hush think weve got work to do in home, and we are rattling working on a project with 20/20 at the moment, to look at Debenham?s home business. (M2PressWIRE (2007) world(a) subdivision Store retail 2007: wherefore $9 out of every $10 exhausted worldwide in part stores. (M2PressWIRE, 2007)Although weve been around for over ascorbic acid years, we only have 140-odd stores. We are filling up Debenham?s channel. Desire. Desire, weve been very pleased with the coiffureance of Desire. We have unfastened more stores. Just to remind you, the sales densities and the margins are higher than the section stores. Margins are about 600 bps higher. We success to the full introduced childrenswear into the stores by removing the cafes. So Desire, continuing to roll more stores out. International business is a growing part of Debenham?s business, although small in terms of P&L impact. Weve now got 36 stores trading crossways 16 countries, with 1.5m square feet of retail out there. Weve got a strong opening program. Weve gone into Russia, India, Romania, Jordan. As we move forward, youll see us open in the Philippines, another(prenominal) store in Russia and some more stores in India. Debenham?s new platform was fully launched. We had USD30m worth of sales in 2006/2007. There is still a lot more emf with Debenham?s lucre site. acquiring the platform robust and fixed was Debenham?s key criteria. Were also focused on victimisation online, as I carry earlier, for advertising and product research, things like that Style DVD and Debenham?s designers talking about what products are on trend. You will not see us move back into brown and white goods in Debenham?s stores. Wines and champagne, weve already got that site up and running. Weve had strong focus on product. Weve got an quicken refurbishment program that I believe underpins some of Debenham?s like-for-like growth. Roches becomes fully ranged with Debenhams merchandise. We will discombobulate substantial margin gains on Roches. Weve got a strong transmission line of new stores coming and the Internet is up and running. (Brown, 2008)Key FundamentalsFinancials - Interim (15/4/2008)Turnover$m1,029.3Pre- revenue enhancement Profit$m92EPSp7.19DPSp3.80Symbols on the graph: DEB - Debenhams PLCDEBENHAMS PLCINTERIM RESULTS FOR 26 WEEKS end 1 MARCH 2008Financial Highlights? consummate(a) work value for 26 weeks up 1.2%; like-for-like sales down 0.7%? everlasting(a) execution value for 32 weeks to 12 April 2008 up 0.8%; like-for-like sales down 1.0%?Gross margin for 26 weeks down 20bps pursual investment in lower prices; gross margin for 32 weeks down 10bps? publicize profit before evaluate* ahead of consensus at $94.1m (H1 2007: $107.4m)?Net debt at 1 March 2008 improved by $37.2m to $979.3m? grassroots earnings per share 7.6p (H1 2007: 8.8p)?Interim dividend per share maintained at 2.5p; scrip alternate to be offered*Before non-cash debt fee write-off of $2.1m (H1 2007: $1.9m) direct Highlights? food market share gains in all major clothing categories? infrangible sales performance from Designers at Debenhams?3 new department stores, 2 resited department stores and 1 Desire store opened; net 107,000 sq ft space growth?Store job at 22 department stores over the next 3 years including flagship stores in Liverpool and vacuous City?Refurbished stores continuing to perform well; program being managed in line with preponderant market conditions?Continued strong growth in debenhams.com with sales up 81%?7 new international stores openedFINANCIAL SUMMARYH1 2008H1 2007ChangeGross transaction value (GTV)$1,303.6m$1,287.8m+1.2%Like-for-like sales -0.7%Operating profit$127.5m$139.6m-8.7%Gross margin -20bpHeadline profit before tax*$94.1m$107.4m-12.4%Profit before tax $92.0m$105.5m-12.8%Earnings per share7.6p8.8p-13.6%Dividend per share2.5p2.5p-01-03-0801-09-07ChangeNet debt $979.3m$1,016.5m$37.2mReferencesAshmore, Sonia. (2006) Extinction and Evolution: subdivision Stores in capital of the joined Kingdoms West End, 1945-1982. London Journal, 31:1, 41-63. Publisher: Longman; Maney. ISSN 03058034Brown, William (2008) Departmental Stores ? Debenhams Plc. Oxford University Press. Buggs, S. (2006) armed combat for Middle America: retail Houston Chronicle (TX), Nov 22. M2PressWIRE (2007) Global Department Store Retailing 2007: Why $9 out of every $10 spent worldwide in department stores. Steinberg, D. (2004) A fracas in formulate brings hope to department stores. Philadelphia Inquirer, The (PA) If you insufficiency to get a full essay, order it on our website:
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