Debenhams is to house Mike Ashley’s Sports Direct and Costa in some of its stores as part of a trial that could lead to the arrival of a number of other leading brands.
The department store chain is keen to drive better returns from its shops after admitting recently that 10% of its UK space was under-performing.
As a trial, Sports Direct which is part of the Newcastle United owner’s retail empire, will open two sports concessions in Debenhams stores in Harrow and Southsea during August and potentially more stores before the end of the calendar year.
Coffee brand Costa will launch concessions in six stores - Guildford and Slough during this month and Derby, Exeter, Haverfordwest and Woking in July. Debenhams said it was in discussions with a number of other brands.
The chain, which has 158 outlets in the UK, is battling to improve its fortunes after a disastrous Christmas performance led to a sharp fall in half-year profits.
It said today that its outlook for the year was unchanged after like-for-like sales for the 14 weeks to June 14 rose 0.7% on an underlying basis. The figure excludes the impact of its summer sale, which is starting two weeks later than last year.
Chief executive Michael Sharp said: “Whilst it is clear that consumers are aware of improvements in economic indicators, they are not yet seeing a significant improvement in their disposable income.”
Debenhams and Sports Direct, have held talks in recent months about how to work together.
This came after Sports Direct bought and sold a 4.6% stake in Debenhams worth around £46m within a few days. This was replaced by a complex financial arrangement giving Sports Direct the option to buy 6.6% of the department chain at a later date.
Debenhams has embarked on a strategy of less promotions and discounting after its Christmas offers flopped.
It said: “Since the end of the January sale we have removed a number of events from the promotional calendar.’’