Franchising helps Debenhams expand overseas

For more than 15 years, Debenhams has been using franchising as a way to extend its network of stores throughout the world.

Debenhams International has been having so much success exporting its business model by franchising, it now has 69 stores spanning 25 markets, including the Middle East, Mediterranean, Eastern Europe, Scandinavia and Asia, which generate a retail turnover in excess of £375 million.

Derihon Coquard, Debenhams’ International Business Development Manager, says: “Our unique franchise proposition has established core and designer private label brands across fashion and home categories at high street prices. This, coupled with the highest levels of customer service, strong promotional calendar and enhanced visual displays, provides a globally superior department store experience.”

One of the keys to the success of the Debenhams International franchise opportunity has been the flexibility it allows its Master Franchise Owners,regarding the size of its stores, which can range from 15,000 sq.ft. to 130,000 sq.ft., according to local market conditions.

“Our product ranging is filtered so that it is fully applicable to the local market,” explains Derihon. “All of this is captured under the corporate guidelines of the Debenhams fascia, which is instantly recognised whether you see our stores in London, Dublin, Dubai, Istanbul, Jakarta or Mumbai.”

One of Debenhams’ longest and most successful international Franchise Agreements is based in the Middle East, where, with franchise partner Alshaya, it now trades from 24 stores across eight countries.

Alshaya has the franchise rights for more than 55 brands and Debenhams was among its first partners with a co-operation dating back to the mid 1990s.

“Debenhams is well established as a key department store in this region with a turnover approaching £200 million a year and flagship anchor stores in high profile locations such as The Mall of the Emirates and Dubai Mall,” states Derihon. “Our stores in the Middle East have become a magnet for both local customers and tourists who enjoy the franchise’s shopping environment.”

A more recent franchise success is in Armenia, where Debenhams opened its first store in Yerevan at the end of 2010. Since then, Debenhams has opened home stores within its partner’s supermarket operation and with who it is due to open its first store in neighbouring Georgia later this year.

Debenhams is now scouting other possible locations in Armenia, Georgia and Belarus with its partner to support the strong sales that they are achieving in this region.

Derihon says Debenhams is now looking at consolidating these successes: “Over the next two to three years, we are looking to build successful franchise partnerships in markets where there is a substantial growing middle class population that have significant retail purchasing power.

“We are really interested to talk to strong pan-regional players in Latin America (Central and South America), Africa (Sub Saharan Africa) and Eastern Europe (such as Poland and Ukraine).”

Debenhams is also assessing the more developed markets where it feels that its brand can challenge the established retail players including North America, Australia, New Zealand, Norway, Sweden and Finland.

Written by Fraser McKay