Q&A: Michael Sharp, Debenhams chief executive

How do you assess your performance?

We have performed well in what has been a very challenging market. We are making progress against the four pillars of the strategy we outlined last October which is encouraging.

The UK is now out of recession, what is your view on consumer confidence?

My view is that we have seen no material shift in consumer confidence. Confidence is still bumping along the bottom. Customers have really acclimatised and are becoming more discerning in their spending.

You have increased your international ambitions, what is your thinking?

We have increased the target from 130 to 150 stores because we are confident in how the business is performing. We have a great presence overseas. Our strategy is to focus on emerging and distant markets through franchises which is a low risk, low capital model. We are focussing on taking that model through the Middle East and Asia as that’s where the growth is. Our point of difference is that 50% of products sold are our own.

What have been your own brand heroes?

I have been pleased with the performance of the Designed by Debenhams range. H! by Henry Holland has done well, as has No. 1 by Jenny Packham and I’m very excited by the launch of Marios Schwab. It reinforces us as a destination for women’s clothing. We have enjoyed 40% market share growth in women’s clothing. People are liking the product that we are stocking in store and we have also increased our marketing spend. For so many people Debenhams are a hidden secret.

How has your Life Made Fabulous campaign performed and what are your Christmas marketing plans?

Life Made Fabulous has driven sales as well as the perception of the brand. More people are seeing that Debenhams is changing for the better. We will have a marketing campaign for the Christmas which will again drive sales. We are spending money on the Christmas marketing campaign because we are confident it will work. It will focus on talking to customers about our products. We will have a full TV and press campaign launching in early November.

You have increased your target for £600m in sales in the next three to five years. What gave you the confident to do that?

This year we have seen growth of 40% to £250m in sales. We are ahead of where we expected to be and growing three times faster than the market. Anything like free wi-fi in store, making shopping easier and more exciting help as does mobile. Mobile is forecast to be a bigger channel in terms of sales than from PCs. That’s one of the reasons we have been investing in online over the course of the last three years including our online fulfilment centre in Peterborough and our Sherburn distribution centre.

What do you expect the level of discounting to be at Christmas?

Our promotional strategy is laid out well in advance. Our promotional calendar will be largely the same as last year.