All work is competitively tendered using a limited number of suppliers. For new-build, some seven contractors are used and store modifications are carried out by nine or 10 contractors. This list of suppliers is reviewed continually.
Current and future projects
Debenhams' capital investment programme increased slightly in the financial year to August 2002, to £128m. This upward trend should continue. Expenditure in the current financial year, to August 2003, is forecast to rise to £140m and increase further to £150m in each of the following two years.
The company is planning to open 13 new stores over the period to spring 2006, two of which are resites of existing stores. Debenhams is trading from about 780,000 m2 of retail space and the new openings will add 100,000 m2 to this total.
The company's 10-year target is to have 150 outlets across the UK, which implies a further new store programme of 39 outlets over the period 2006-10. If this plan is to be met, it would entail an expansion of the new store programme to seven or eight openings a year. This would suggest a further increase to its construction investment. In addition to new store openings, the company also has a programme of store modernisations and aims to upgrade at least 10% of its chain each year. An average modernisation costs more than £3m, and reaches maturity within three years. Twelve stores were modernised in the year to August 2002 and a further 11 modernisations are planned over the next 12 months to August 2003.
Debenhams, which dates back to 1778, was acquired by the Burton Group in 1985. At that time it had a portfolio of 65 stores. In January 1998, it demerged from Burtons to once again trade as an independent company. In the year to September 2002, the company had sales of £1.7bn. It is also developing a direct order business, which in the year to September 2002 had sales of £34m.
The company has an international franchise business whereby it operates with local partners. In 2002, it opened stores in Sharjah, Stockholm and Jeddah.
The company is a partner with J Sainsbury, BP and Barclaycard in a new loyalty card called Nectar. This group is being joined this year by the Thresher off-licence chain.
Head of store development John Gray Contact details
1 Welbeck Street,
London W1G 0AA
phone: 020-7408 4444
fax: 020-7529 0674
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