“We are continuing to invest in the UK to provide our customers with the best possible shopping experience, whether instore or through one of our growing range of multi-channel access points.”
Nigel Northridge, Chairman
Chairman's statement
Debenhams made good progress in 2011 despite what has undoubtedly been one of the most difficult years in the retail sector for some time. We achieved growth in sales and profit before tax, made a further substantial reduction in net debt and reinstated the dividend for the first time since 2009.
Board succession
One of the most important functions for the board of any company is succession planning. It was announced in April that Rob Templeman would retire as Chief Executive of Debenhams at the end of the 2011 financial year. Rob led Debenhams for nearly eight years and the board and all his colleagues would like to thank him for the enormous contribution he has made.
At the same time we were delighted to announce that Michael Sharp would succeed Rob as Chief Executive and he did so on 5 September 2011. Michael has worked for Debenhams or its predecessor the Burton Group since 1985. After serving as Chief Operating Officer between 2004 and 2008, he became Deputy Chief Executive in November 2008. Michael’s commitment to and knowledge of Debenhams is therefore second to none and he has played a key role in managing the business at the highest level as Deputy Chief Executive. We look forward to the Company’s continued success under Michael’s leadership.
You can read about Michael’s plans for the future strategy of Debenhams in detail here. As a board, we believe there are many opportunities for growth across the business, both in our home market in the UK and in our growing international business.
Investing in the UK
Our UK operations are the cornerstone of our business. We are continuing to invest in the UK to provide our 11.5 million store customers and many millions more multi-channel customers with the best possible shopping experience, whether inshore or through one of the growing range of multi-channel access points. We are investing in UK infrastructure and over the past five years we have created over 3,000 jobs in the UK through our new store opening plan, including three new stores in 2011 which employ a total of 350 people. The pace of our store modernisation programme is accelerating so that all of our customers will have a local store they and we can be proud of: this too is creating much-needed jobs around the country. We are investing in technology and logistics for both customer facing and back of house systems to create a truly multi-channel business. And of course we are investing in British design talent through the highly successful Designers at Debenhams programme.
Expanding our global reach
At the same time we are taking advantage of opportunities to expand our global reach as we know that our exclusive own brands are just as attractive to overseas consumers as they are in the UK. Our Danish business Magasin du Nord has had a very good year and has met all expectations since we acquired it in 2009. We have ambitious plans to increase the number of international franchise stores from the current 65 in 25 countries. The number of countries we deliver to using the UK online infrastructure is increasing from seven to 67 and a number of local language, local currency websites will be introduced over the next year.
A sustainable future
During the year we have begun work on a major sustainability project that aligns the long-term interests of our business with those of the environment, our employees and our communities. You can read more about this work from Martina King, who is chairing the project, here
The board and governance
We have a strong and diverse board which is well equipped to meet its obligations to shareholders and to drive the business forward. During the year Mark Rolfe joined the board as a non-executive director and of course Rob Templeman retired from the board when he stepped down as Chief Executive on 4 September 2011. The board welcomes the new UK Corporate Governance Code. In accordance with the Code, all the directors will offer themselves for re-election at the Annual General Meeting to be held on 10 January 2012. You can find the board’s corporate governance report, including the reports of the board’s committees, here.
To summarise, whilst it has been a difficult year in the retail sector, we are pleased with the performance of Debenhams. Quite clearly this has only been achieved through the dedication and hard work of all our employees. They have had a lot to contend with over the past 12 months, not least struggling to get to work in some of the worst winter weather for years and coping admirably with the challenges presented by the August 2011 riots. The board thanks them for their ongoing support and commitment. We all look forward to a successful year under the leadership of our new Chief Executive.