Debenhams CEO Stands Down, Results In Line
14 Avril 2011 - 10:36AM
Dow Jones News
Department store retailer Debenhams PLC (DEB.LN) said Thursday
Chief Executive Rob Templeman will retire after eight years at the
helm as he presided over in-line first half results.
The 53-year old will make way for deputy chief executive Michael
Sharp, 54, in September at the company's year end, and will remain
in a consultancy capacity for a further six months.
Sharp, who has worked at the company for 14 years, said on a
conference call Thursday that his strategy would be more "evolution
than revolution" as the company continues to improve margins by
moving from concessions to own-bought clothing sales, a prescient
strategy in the current economic climate.
The fight for a share of consumers' ever-shrinking disposable
income combined with continued inflationary pressures means the
retail outlook is tough and likely to get tougher.
Companies which have protected their margins and profits rather
than chasing sales at any cost, including clothing rival Next PLC
(NXT.LN) and DIY specialist Kingfisher PLC (KGF.LN) have been
rewarded with share gains, and Debenhams shares added 1.57% at 0742
GMT to trade at 68 pence.
Templeman doesn't expect consumer confidence to change in the
near future, but he did say sales had improved at the start of the
second half compared to across the first half of the year.
"At the start of the second half, our exit run rate was an
improvement on the first half run rate," Templeman said, adding
"we're not recognising some of the comments people are making about
big sales falls."
Figures from the British Retail Consortium Wednesday showed a
sharp drop in retail sales in March, down 3.5%, hit by consumer
uncertainty about jobs and income, but also muddied by the timing
of Easter, which is in April this year.
Clothing retailers have had to contend with cotton prices well
above 15-year highs since November and wage inflation in
manufacturing countries, both of which have forced prices up at a
time when the U.K. consumer is already under pressure.
Debenhams has seen costs increase around 8% in the period,
although Templeman said the company had managed to hold back around
half of that increase in its store prices through better supply
chain management and the changing mix of its business.
He expects prices to rise further through the autumn/winter
season but cotton prices look set to fall back in time for the
spring/summer collections next year, based on the commodities
futures market and the incoming cotton crop.
The U.K.'s second-largest department store behind Marks &
Spencer Group PLC (MKS.LN) reported first half pretax profit before
exceptional items up 4.5% to GBP129.2 million, in line with market
expectations, on pre-announced sales up 3.5%.
Net profit rose to GBP91.5 million from GBP80.1 million last
year.
Having brought down its debt from more than GBP1 billion to
GBP351.6 million, the company reinstated its dividend after a three
year hiatus with an interim payment of 1 penny per share.
By Kathy Gordon, Dow Jones Newswires; 44-207-842-9293;
kathy.gordon@dowjones.com
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