Debenhams Makes Deep Cuts to Management Ranks

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Debenhams

Debenhams announced plans Thursday to cut 320 store management positions as part of its accelerated Redesigned strategy.

The cuts make up one quarter of the chain’s management team.

The department store, which operates 246 stores in 26 countries and is available online in more than 60 countries, is coming off of a poor holiday performance. It reported same store sales were down by 1.3% during the last 17 weeks of the year. A weakness in gifts in particular led the retailer to become more promotional immediately before and after Christmas.

As a result, the company announced last month that it would be stepping up its Debenhams Redesigned turnaround efforts, including reorganizing and restructuring its stores and support centers. The retailer said it expects those steps to generate an annualized savings of £20 million ($27.8 million), £10 million ($13.9 million) of which is to be realized in FY18.

First announced in April, the plan aims to define what the store’s about, drive more visits both online and in stores and improve efficiency. As a part of the strategy, the company has set out to “fix the basics,” which includes decluttering stores, replenishing stock faster and evaluating the store portfolio.

The company anticipates annual capital expenditures of £150 million ($208.6 million) going toward mobile systems upgrades, supply chain improvements and store real estate refurbishment.

[Read about how other competitors are dealing with the current retail environment: Tesco Streamlines Operations, Cuts 1700 Jobs]

Debenhams CEO Sergio Bucher said at the time “Shopping with Debenhams should be effortless, reliable and fun whichever channel our customers use. We will be a destination for ‘Social Shopping’ with mobile the unifying platform for interacting with our customers.”

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Debenhams is just one of a slew of retailers struggling in the current retail climate. Last week Marks & Spencer announced it would close at least six stores, as it seeks to reduce its apparel and home floor space. Same-store sales for the company’s third quarter, ended Dec. 30, declined by 2.8%.

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