Burton to demerge Debenhams

The Burton Group has startled the retail world by announcing plans to demerge its flagship Debenhams department store chain, which will be floated separately on the stock exchange.

As part of the plan, the Burton corporate brand will disappear as the company’s remaining businesses are reorganised into a single business under Burton Group chief executive John Hoerner. Terry Green, chief executive of Debenhams, will lead the demerged department store group.

Chairman Sir John Hoskyns said this week that the demerger plan, originally mooted in 1994, was put on hold despite its “underlying logic” because of weaknesses in the business performance of Burton’s remaining retail chains.

Richard Hyman, chairman of retail analysis company Verdict Research, says a demerged Debenhams could expect a warm welcome on the stock market, as the department store sector “enjoys its strongest performance in decades”.

The remaining Burton Group may face a tougher time because of its weaker trading performance, says Hyman. “But its management team is tried and tested, and there is a lot of potential for recovery in business performance in the multiples businesses,” he adds.

The residual Burton Group, accounting for just over half existing turnover, will comprise 1,369 retail sites operated by Dorothy Perkins, Burton Menswear, Top Shop, Evans and Principles. The group also owns home shopping brands Racing Green, Hawkshead, Innovations and McCord.

Turnover at Debenhams is expected to comfortably break through the 1bn barrier this year, compared with 998.3m sales achieved in the 12 months to August 31 1996.

Debenhams achieved a profit of 102m for the group over the same period, compared with 58.8m achieved by Burton’s other multiples on a turnover total of 1.02bn.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here