Debenhams looks at overseas buys to cut reliance on domestic market
DEBENHAMS, the UK's second-largest department store, will consider buying more chains like Roches Stores in order to become less reliant on its slowing home market, finance director Chris Woodhouse said yesterday.
Debenhams has about 50 outlets run by franchise partners from Iceland to Malaysia, but its first expansion overseas came in 2006 when it took over nine Roches Stores shops for €29m.
Last month, it repeated the experiment when it bought Denmark's six-store Magasin du Nord chain for €14m.
"Once we have proved the business model, then there is no reason why we could not replicate the Magasin opportunity across other countries in Europe," Mr Woodhouse told Bloomberg yesterday.
He added: "Funding is always available for the right deal."
Debenhams has 142 stores in the UK, where retail sales rose at the slowest pace in 15 years last month, according to the British Retail Consortium.
"Magasin du Nord is an attractive proposition and this adds a potentially attractive growth angle," said Adam Cochrane, an analyst at UBS.
However, he also said the problem for Debenhams would be: "How repeatable is this deal?"
The company is adding exclusive designer ranges, such as John Rocha, to the Magasin Du Nord stores and improving inventory purchasing to increase profitability, according to Mr Woodhouse.
Earlier this month, the company said that up to 250 staff would lose their jobs in Ireland as some of its branches were no longer profitable.
Two of its Dublin outlets, including the flagship store on Henry Street, will be worst affected by the cuts on the sales floor, in food services and in finance and operations.
A spokesperson for Debenhams insisted it would not be closing branches here and that the company remained committed to Ireland. It has invested €45m in this country over the past five years.
The chain has four stores in Dublin and two in Cork, in addition to branches in Limerick, Galway, Newbridge, and Tralee. It employs 1,700 people here.