Non Financial Informationpresentation

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Group GTV increased by 1.7% with growthin both the UK (up 0.9%) and International(up 5.1%) segments. whilea big fell of the Gross margin because of intake margin,sales mix and markdown

Group LFL sales increased by 1.0%, drivenmainly by UK and International online salesand by our Danish stores. The online trading became much more important year by year, for Online GTV increased by 17.6% to £430.7million, representing 15.3% of total GTV.

Expanding the brand internationally returns DebenhamsconsiderableGTV。And The key drivers of International growth willcontinue to be Denmark, franchise storesand online.

Lower profits resulted in a 22.8% decline inEPS to 7.1 pence.

Carbon emissions increased by 11% largelydue to an increase in the emissionsintensity of UK grid electricity. But Debenhamsstill searching for a Sustainability

Threat of Entry - MODERATE

Economies of Scale –High

In the past few decades there hasbeen a decrease in the numberof independent retailers. The increased size of many UK department stores and their verticalorganizational structures has

enabled them to enjoy maximizedcost efficiency and economies ofscale, which in turn has resultedin the reduction of the prices oftheir goods. While it is not impossible to break the entry barriers,the competitive advantages ofincumbents due their cost advantages make entry virtuallyimpossible.

Capital Requirements –Moderate/High

Entering the retail industry mayrequire relatively high capitalinvestments. The entrant has toincur costs for advertising, marketing, set-ups, licensing, productregistration and contracts withsuppliers in an attempt to gainmarket share.An article by the office of fair trading noted that although it has yetnot been proven whether capitalrequirements constitute barriersto entry, they definitely slow itdown. Incumbent retailers appear to raise capital relatively easier than the entrants (oFT, 1997).

Cost advantages Independent ofScale - High

Factors such as long-term relational contracts with suppliers,having first move advantages inaccessing favourable geographical locations and steep experience curves have given incumbentsabsolute cost advantagesand have resulted in deterrenceof entry (OFT, 1997).

Legal Barriers-Moderate

In 2011, the British government putinto effect its “plan for growth” policy,which resulted in the removal of 130out of the 257 restrictive regulations,and the simplification of some 30other regulatory policies. This was inan attempt to promote the growth ofsmall businesses, decrease bureaucracy and stimulate the economy. However, a new government in 2015, is dampeningexpenditure.

Retail Sites –Moderate

For retail stores such as Debenhams, having access to “primegeographical locations” is of vitalimportance.Accessto retail sites is often considereda barrier to entry, when therehave been governmental andregulatory interventions, whichset restrictions and limitationson the entrants(OFT, 1997). Forinstance in 1996, the implementation of planning regulations bythe British government resultedin the rapid decline of planninggrants to large retailers. Thispolicy required retailers, whichwere planning on opening storesthat were over 2,500 square meters in size, to pass a “sequentialtest” and a “test of need” (Sadun,2008).

Rivalry Amongst Existing Competitors

Concentration – Moderate/High

In 1980s, following the relaxationof the restrictions on UK retailers,many companies took advantageof the growth cycle by increasingtheir sizes and market concentrations. Department stores suchas Debenhams, Marks & Spencer,John lewis and House of Fraserhave increased significantly insize and have taken a considerable share of the overall market.

Industry Growth – Slow

Total sales continuing falls by, the slowgrowth in the UK retail industrymeans that companies must compete fiercely in order to be able tocapture market share

Cost-high

The majorvariable cost of retailers is theirlabour force. Because the Chinese government’s proposed policy for increasing minimumwages is enacted, Debenhams’ costs of sales considerablyincreased.

Threat of SubstituteProducts – HIGH

There are many substitute products offered by retailers withsimilar functions and purposes.Fashion clothing, accessoriesand home furniture are easilyreplicable and can be producedat relatively low costs and sold atreasonable prices.Therapid growth in e-commerce andonline services is expected to create many substitute services andstrip a large share of the marketfrom physical retailers.

Risk management

P26的图 P27的两个图

Risk managementand internal control are responsibilities of The board of Debenhams, and be considered as important part that there should be a regular andsystematic approach to the managementof risks in order to provide assurance thatstrategic and operational goals can be metand the Group’s reputation is protected

theRoles and responsibilities are clearly, and the stable management framework can give a quick fixes for risks.

SWOT

Strengths

In the uK, Debenhams has a leading position in health and beauty, top four market share in menswear and womenswear and it is the 11th largest online retailer. Debenhams’ strong and long-lasting relationship with its suppliers has enabled it to enjoy high levels of flexibility and allows the company to negotiate favourable terms with its suppliers. Moreover, Debenhams has been able to sustain its brand value and quality reputation over the years and has offered a differentiated range of products and a strong portfolio of brands to its customers

Weaknesses

Debenhams has defined its target market toobroadly, which has prevented it from positioning itsproducts more effectively.

Furthermore, the operating profit margin of the company has been follow-ing a downward trend in the recent years.

The number of low price labour had decreased, new sub-contractors