Debenhams and Arcadia plot DM push for new credit cards

LONDON - Debenhams and Arcadia are launching credit cards to protect profits in the face of an impending retail recession. Both companies are enlisting direct marketing agencies to help them launch the products.

Debenhams has this week appointed Interpublic's FCBi to create a below-the-line launch campaign following a four-way pitch. The agency has experience in this field -- it works for Goldfish -- and recently helped BSkyB to launch a loyalty card.

Meanwhile, Arcadia, the company whose portfolio of high-street brands includes Burtons, Dorothy Perkins, Top Shop and Top Man, is in talks with numerous direct shops about the launch of its Arcadia-branded credit card.

The retailers' new strategies come at a time when many commentators are warning that the UK is moving towards a retail-led recession.

According to CBI figures for April, UK retail sales fell at their fastest pace for almost 13 years, with 46% of retailers reporting a year-on-year decline in sales.

However, Debenhams has suffered less than many of its rivals. Its pre-tax profits rose by 270% to £162.2m for the six months to the end of February, while its underlying sales rose by 4.2%. The company, which was taken private in December 2003, is expected to float later this year.

Debenhams confirmed that it was talking to agencies about an unnamed project earlier this week, but was unavailable to comment on FCBi's appointment. Meanwhile, no one at Arcadia was available for comment.

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