Case Study

Debenhams

Debenhams is a British multinational retailer operating department stores in the United

Kingdom, Ireland and Denmark with franchise stores in other countries. The company was

founded in the eighteenth century as a single store in London and has now grown to 178

locations across those countries. The business was formed in 1778 by William Clark, who began

trading at 44 Wigmore Street in London as a drapers' store. In 1813, William Debenham became

a partner and the corporate name changed to Clark & Debenham. The business was incorporated

as Debenhams Limited in 1905 and the company was first listed on the London Stock Exchange

in 1928. Debenhams opened its largest British store on 4 September 2003, at the new Bull Ring

shopping center in Birmingham. The new store contains 19,230 sq. m and opened 20 years after

the company closed its Birmingham city center store due to declining trade. In November 2009,

Debenhams acquired the Danish department store group Magasin Du Nord for £12.3 million.

The company operates six stores in Denmark under the Magasin brand.

Debenhams moved to a new headquarters in 2013, in Brock Street, London built by British Land

in Regent's Place. The company began a refurbishment of its flagship store in Oxford Street in

2013, which involved the installation of 180,000 aluminum tiles on the exterior of the building

that appears to ripple with the wind. An existing floor was also converted to become a trading

floor. The total cost of the refurbishment was in the region of £40 million, of which Debenhams

contributed £25 million. The company's trading statement for the 17 weeks up to 28 December

2013 was released on 31 December 2013 and revealed a reduction in pre-tax profit from £115
million to £85 million. On 2 January 2014, the company's chief financial officer Simon Herrick

resigned, following criticism of his financial decisions. On 13 January 2014 4.6% of Debenhams

shares were bought by Sports Direct, the retailer run by Mike Ashley. The stock market purchase

of 56.8 million shares (worth around £46m) was made without the prior knowledge of the

Debenhams board. Sports Direct stated at the time it intends to be a supportive share holder. The

Debenhams board responded by stating they are open-minded about exploring operational

opportunities to improve its performance. Sports Direct sold its shares on 16 January 2014,

although they took out an option to buy further shares up to a total of 6.6%. In August 2017, it

emerged that Ashley had secured 21% of the shares which gave him over 10% of voting rights in

the company.

In 2010, Debenhams announced the launch of four new designer names to its fashion range;

Jonathan Saunders, Preen, Jonathan Kelsey, and Roksanda Ilincic. Stores also contain

concessions whereby other retailers may trade. Brands in stores include Oasis, Coast, Phase

Eight and Warehouse. In June 2014, the company announced a trial of Sports Direct concessions

in its Harrow and Southsea stores, which if successful would be expanded to other stores. This

followed the purchase of a stake in Debenhams by Mike Ashley, the owner of Sports Direct, in

January 2014. Later that year, Debenhams also launched trials of Costa Coffee and Mothercare

concessions within stores.

In October 2016, the company announced it would begin to focus less on clothing and more on

food, beauty products and gifts. It also hired the former lighting buying team of collapsed rival

BHS to begin introducing new lighting departments in stores. Debenhams followed this in
December 2016 with a plan to discontinue its Betty Jackson Black ladies fashion brand, and

significantly reduce its Jeff Banks menswear range in favor of expanding the Hammond & Co.

brand. The company operates retail websites in the UK and Ireland, as well as a mobile-enabled

website and mobile apps that allow customers to shop the online range and scan product

barcodes in store. Debenhams provide store card and credit card services, operated by NewDay.

Insurance products are also provided under the Debenhams brand by other financial companies.

The Debenhams brand is used for stores operating under license in 26 other countries, then

announced in January 2013 that it planned to increase the number of international franchise

stores to 150 within 5 years. In late 2015 it was announced that Debenhams had acquired all

seven Stockmann stores in Russia.

Question:

Refer to the case study, what are the strengths, weaknesses, opportunities, and threats (SWOT)?

Instructions:

 This is an individual assignment

 You need to submit: 1 page SOWT analysis written as points.

 You must include a cove page with your full name, full IDs, course code, Sec No. e.g.

[BUS 231 / Sec #].

 The assignments must be neatly typed, justify the text, use font: Times New Roman, font

size 12, and double spacing).

Due Date for submission: Aug 3.