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LONDON, June 20 Britain's No. 2 department store
chain Debenhams is to trial Sports Direct and
Costa coffee concessions in its stores as it seeks to get higher
returns by making better use of its space.
Debenhams, which gave an update on third-quarter trading on
Friday, said two stores will get Sports Direct sporting goods
concessions in August, with potentially more to follow by
Christmas. Costa coffee, owned by Whitbread, will launch
in six stores this month and in July.
"We'll do those trials and see where we go from there,"
Chief Executive Michael Sharp told reporters.
"There are also some other retail brands that we continue to
talk to," he said, declining to give any names.
Sports Direct bought a 4.6 percent stake in Debenhams in
January. It swiftly sold it and took out an option that could
leave it with a larger stake.
Debenhams has endured a tough 12 months, issuing its second
profit warning in less than a year in December and losing its
finance chief after a long-held strategy of pushing promotions
failed to boost its crucial Christmas sales.
In April, the 200-year-old firm reported first-half profit
down by a quarter and Sharp said he would reduce promotions,
make its online business more competitive with more delivery
options and redeploy excess store space.
The firm has identified about 10 percent of space in its 158
UK stores as underperforming.
"The way to make that space more efficient is to add more
choice to it," said Sharp.
He said customer research had shown they wanted to see more
sportswear in Debenhams stores. Sportswear currently represents
less than 1 percent of the firm's total sales.
Debenhams, which trails John Lewis in annual sales,
said sales at stores open over a year rose 0.7 percent in the 14
weeks to June 7 as it shifted its strategy to have fewer days on
promotion so it can deliver a higher level of full-price sales.
This year its summer sale is starting two weeks later than
last year, on June 26.
Debenhams also said on Friday it was starting a debt
investor roadshow in relation to a 200 million pound ($341
million) seven-year bond issue.
Shares in the firm, down 29 percent over the last nine
months, were up 0.8 percent at 72.8 pence at 0755 GMT, valuing
the business at 891 million pounds.
($1 = 0.5864 British Pounds)
(Reporting by James Davey; Editing by Erica Billingham)