DEBENHAMS BUSINESS STRATEGY

Debenhams Business Strategy



Debenhams Business Strategy

Introduction

Debenhams is one of the UK's leading department stores groups, with 153 stores throughout the UK and Ireland plus 49 international franchise outlets. The company has a strong presence in women swear, menswear, homeward, health and beauty, accessories and children swear. Debenhams' exclusive own brands, including Designers at Debenhams, differentiate the store from its competitors. The company's first shop opened in 1778 as a drapers store selling expensive fabrics, bonnets, gloves and parasols. Debenhams owned Harvey Nichols from 1920 to 1991 and was part of the Burton Group from 1985 to 1998 (Chaloub, 2009, 121).

Debenhams first entered the international market in the late 1990s, when it opened its first store in the Middle East; since then it has gone on to establish more stores in the region and has expanded its international operation to Scandinavia, Hungary and Malaysia. Over the past four years, international sales have grown and the company emphasises that it is expanding out of strength, and not as a response to difficulties in the home market.

In the UK, Debenhams, which promotes itself as “Britain's favourite department store” is performing well and operates 100 stores in the UK and Ireland. The retailer's own brand ranges have been a large part of that success, in particular the “Designers at Debenhams” range.

Strategy 1

Retail expansion in the Middle East

When considering new markets, Debenhams looks for countries where there is an opportunity for a large space retailer. The market selection process will include such factors as an economic profile, comparison with other retailers and space availability.

The Middle East has proved an attractive market for European and US companies, with hotel developments, fast-food outlets and retail outlets being seen increasingly in the major cities of the region. Retailers such as Monsoon, Arcadia and Next opened outlets during the 1980s and 1990s. Mother care has a network of stores in the Middle East including 22 outlets in Saudi Arabia. Of the UK department and variety stores, only Bhs, Liberty and Marks & Spencer have expanded in the Middle East. More recently in 2001, Harvey Nichols opened in the Riyadh, Saudi Arabia and is developing its own brand clothing, fragrances accessories and food (Chaloub, 2009, 69).

Economic and political environment

In geographic terms there is some argument about the definition of the region that we generally know as the Middle East. An analysis of the region's political, economic and business prospects for 2001 by the Business Middle East (2000) included the following countries: Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, Turkey, United Arab Emirates and Yemen.

The countries of the Middle East have been described as some of the most exciting emerging retail markets, with some of the world's wealthiest young consumers and fastest growing populations. However, it also has some of the traits of emerging markets - weak political structures and heavy dependency on oil revenues.

Promoters of a recent World Class Retailing conference “Exploring the Emergence of the Middle East ...