Debenhams and Mothercare scrap constant promotions to see profits rise, proving sales aren't always the answer

Both high street chains have noted revived profits since reducing the number of discounts available in store

(Rex)

Promotions and sales might not be the money-spinner they are supposed to be if results from Debenhams and Mothercare are to be believed.

Both high street chains have noted revived profits since reducing the number of discounts available in store.

Department store Debenhams continued its strong momentum from Christmas, after years of struggling with profit warnings, to see sales for the six months to end of February rise 1.7% to £1.1 million, with pretax profit rising 4.3% to £88.9 million.

This was despite the retailer reducing the number of promotional days by 14 during the period and cutting back on discounting in areas such as cosmetics.

Chief executive Michael Sharp said: “Promotions have always been a strength. It’s not about ending promotions, but being more focused and removing events that create noise but don’t create value.”

Like for like sales rose 1.3%, however, these were flattered by its Springtime Spectacular launching a week earlier this year compared with last. The event accounted for 1% of the sales increase.

Meanwhile at Mothercare, chief executive Mark Newton-Jones remained cautious over the mother and babywear retailer’s future, despite recording four quarters of consecutive growth in the UK for the first time for five years.

Sales in the UK rose 5.1% in the 11 weeks to end of March, meaning full year like for like sales were up 2% on last year, despite drastic cuts to the amount of discounting.

Newton-Jones said: “It’s very early days. We’re still turning the business around and there are going to be plenty of bumps in the road.”

More focus has been placed on higher-end and exclusive products, with cheaper products falling away, however, Newton-Jones was clear that the business was still aimed at everyone.

He said: “We’re not trying to be a Hugo Boss or a Prada here, we’re still mass market.”

High street shops are beginning to gain confidence in moving away from big promotions and sales as the strong contenders in the market, such as John Lewis, drive a move to full-price.

"By communicating a clearer price message to the customer, Debenhams is better able to focus on pushing improvements in product development and innovation, helping to strengthen overall brand credentials," said Sophie McCarthy, a consultant at retail analysts Conlumino.