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Debenhams boosts store appeal by offering Mothercare floor space

In an attempt to make their stores more appealing to shoppers, Debenhams is offering floor space to Monsoon and Mothercare.
The chain has already agreed to deals with Costa Coffee and Sports Direct, in an attempt to stop regular discount days which it was previously reliant upon to boost its sales.

Debenhams has been in a struggle to try and keep up with John Lewis, the largest department store group in the UK, which has shown better performance than its competitors due to its strong website, more affluent customer base and smart stores.

The terrible Christmas trading period prompted a re-assessment at Debenhams.  This resulted in offering 10% of its floor space to new services and brands.  

Sports Direct departments have already been opened in Debenhams Southsea and Harrow, with a further two stores due to open. Mothercare ranges have debuted in Manchester and Croydon in a trial.  It will also appear in the Leeds store during next week.  The area offered to Mothercare in Manchester is 6000ft², which is the same size as one of its individual, standalone stores.

The partnership with Mothercare is being hailed as interesting as its finance director, Matt Smith, is due to take up the same position at Debenhams later during this year. Mothercare is facing its own problems.  The new boss, Mark Newton-Hones, launched a £100m rights issue as it considers closing down stores that are underperforming and revamping its antiquated systems.  Investors will vote on the plan, as the major shareholders are said to be in support of the move.

The dealings of Debenhams with Mike Ashley’s Sports Direct are complicated because of the tycoon’s financial grip on the business.  He holds 11% of the company after he spent £33m last week to purchase close to a 5% stake.  This purchase comes after a derivative deal, which was agreed upon during January, that could result in Sports Direct obtaining an almost 7% share during next year if the share price of Debenhams should decline.

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