Australia will not be an easy market for UK department store Debenhams to break into, according to Myer chief executive, Richard Umbers.

Debenhams, an icon of British retail which began in London in 1778 and now has 243 stores in 28 countries, will open its first Australian store in Melbourne next year.

As reported by Inside Retail Weekly this week, Pepkor South East Asia, an Australian private company and wholly owned subsidiary of the South African retail investment company, Pepkor Holdings Limited, has confirmed that it will launch iconic British department store, Debenhams, in Australia, opening the first standalone Debenhams location in September 2017 over 3600sqm on two levels in Melbourne’s St Collins Lane retail precinct.

St Collins Lane will be the first of 10 planned stores for Australia, each of which is expected to comprise 3600sqm to 4000sqm and be located in Melbourne, Sydney, Perth and Brisbane.

Analysts anticipate that Debenhams’ arrival will have the biggest impact on Myer among local retailers, as both stores target similar customers with a focus on the high-to-mid price range, while Australia’s other big department store, David Jones, is purely focused on the luxury end of the market.

“I think we are well-prepared to take on all newcomers, and I include Debenhams in that,” Umbers told AAP on Thursday after announcing a doubling in Myer’s full-year profit.

“Debenhams is entering a competitive market, with us and David Jones investing heavily and with the discount department sector undergoing significant change.”

“I’m sure Debenhams have done their planning properly, but this is not an easy market to break into.”

The increase in speciality retailers, including international players H&M, Zara and Uniqlo, has been the biggest threat to Australian department stores, he added.

“Speciality retail has been the real challenge for department stores rather than other department stores in the past 15 years,” he said.

Debenhams plans to open smaller-format department stores in Australia, offering an exclusive selection of its designer fashion labels.

Myer is 12 months into its five-year turnaround plan to boost sluggish sales.

Myer announced its FY16 results yesterday, which included net profit more than doubling, partly thanks to sales rising 2.94 per cent in 2015/16, while its key comparable sales figure, which removes the effects of store openings and closures, rose three per cent.

Myer continues to significantly lag behind David Jones, however, which recorded total sales growth of 8.4 per cent in 2015/16, and comparable sales growth of seven per cent.

AAP

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