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Steady performance for Debenhams despite ‘difficult’ conditions

Published: 6 January 2009
Department store reports a 1% increase in gross transaction value on last year with online sales up 37.4%
Steady performance for Debenhams despite ‘difficult’ conditions
Figures released today show that for the 12 weeks since Debenhams plc last reported on October 21, gross transaction value was up 1.1% on 2007.

Like-for-like (lfl) sales for this period were down at 3.3%. However it demonstrated a marked improvement over the lfl decline of 4.2% recorded for the first six weeks of the company's financial year.

Gross transaction value for the 18 weeks ended January 3 was 0.6% higher than the comparative period last year. This is despite a 3.5% drop in lfl sales, which, Debenhams said reflects "the extremely difficult and volatile trading environment seen across the retail sector".

Debenhams Direct, the group's online business saw a 37.4% growth in sales. The company has also opened four new stores since the start of the year, increasing trading space by 2.3%.

Gross margin year-to-date was flat on last year but both pre-tax profit and EBITDA for the 18-week period were up on last year, which Debenhams has attributed to 'continuing tight management of costs and stocks' coupled with the company's decision to 'focus on the levers that drive cash margin'.

Debenhams chief executive Rob Templeman said: "Our trading strategy for the first 18 weeks of the year has resulted in further market share gains and a credible sales performance given the extremely difficult and volatile trading conditions seen across the high street.

"Our increase in profits is pleasing and reflects our stated intention to invest gross margin gains in strategic promotions as needed but overall to run the business focusing on cash profit rather than just sales."

John Lewis announced this week that it had equalled last year's sales. Excluding VAT, total sales were up 2.4% for the five-week period to January 3. Home saw a 6% drop in sales, while electricals and technology experienced a 10% increase.

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