Debenhams Retail Strategy: Supply Chain and Merchandising

Company History and Market Position

Debenhams is a UK-based department store chain with operations in a number of countries around the world. The company operates 153 stores across the UK and Ireland, and offers online delivery to 66 countries through Debenhams Direct, including many where Debenhams does not have its own physical store (Debenhams.com, 2012). The company traces its roots to 1778 in London, where it remains headquartered to this day. Its expansion into an international retail brand has been achieved primarily through franchising, while stores in the UK and Ireland tend to be company-owned. According to the company's annual report, Debenhams earned £2.2 billion in revenue and £117.2 million in profit.

The growth of the Debenhams name as a unified brand only took place in the latter part of the twentieth century. Prior to that point, the Debenhams name was not used on most of the company's stores; instead, regional names were used. The move toward a national — and now international — brand with a high level of operational consistency has guided the development of Debenhams in the modern era. The stores are positioned in the mid-range of the market both domestically and internationally. Outside the UK, the company favors prestigious mall locations, such as the Dubai Mall, Phoenix Marketcity in Mumbai, and the Cevahir Mall in Istanbul. Debenhams competes against other international department store brands, which vary from country to country. As it is not a discounter, the company relies on offering good-value clothing that is appropriate to local culture and season in order to win business.

Product Positioning and Brand Strategy

Within Debenhams, there are both own-branded and third-party branded products. As a general rule, the company has been working to shift its positioning toward the higher end of the market for the better part of the last fifteen years (Koenig, 1997). This shift has corresponded with several changes to its merchandising approach. Debenhams has sought to bring in outside brands associated with higher quality than the store carried in the past, and has also worked to increase the fashionability of its house brands. Generally, the house brands are positioned as value options within the overall store offering, providing similar quality and style to the name brands at a slightly lower price. The name brands attract buyers to the store, while the house brands deliver the value that customers seek. The same approach is applied online.

One third-party brand that Debenhams carries is bluezoo, which offers children's bedding products. An example of a Debenhams own brand is Chino by Debenhams, which produces chino-style trousers and casual clothing. In the physical store, the positioning of these different products tends to be segregated: third-party brands are given specific allocations of retail space, as are own-branded items. This approach differs from the online strategy, which emphasizes mixing different brands together so they are easy to compare. Online customers see all brands within a similar product category at once.

Debenhams organizes its online store this way because it believes that online shoppers think first about the product category they want, and only then seek out individual brands. In-store customers, by contrast, are more likely to browse among different brands, moving from one section to another and viewing the distinct offerings in each area. As a result, branding as a means of physically segregating goods is more important in the physical store than in the online environment.

Supply Chain Structure and Fashion Cycles

The supply chain has a number of key drivers. Debenhams relies on the fashion supply cycle, which begins with designs created approximately six months before the relevant season. This lead time allows designers to prepare and gain approval for designs, and for goods to be produced and shipped to Debenhams in time for the start of the selling season. The company would, for example, be working on the spring collection during the autumn. This is roughly the same time frame that other companies in the industry operate on, and Debenhams uses this approach to ensure that its seasonal collection is produced and in stores by late winter.