Debenhams has reported a rise in half year profits to £127.1m, despite a cautious outlook and “challenging” trading conditions.
The high street department store saw profits edge up 1.4% to £127.1m for the 26 weeks to March 3, while group like-for-like sales were up 1.4% including VAT.
The business brought down its net debt by £71.9m to £311.8m during the period and said it will return £20m to shareholders over the next six months.
Chief executive Michael Sharp told Drapers that he felt the results were “good” given the challenges and was pleased with the business continuing good cash generation and debt reduction.
He said: “The strategy to become an international, multichannel brand is clearly working as witnessed by these results.”
The department store’s market share for womenswear was down 10 basis points for the 12 weeks to March 18, but this was due to the closure of Jane Norman and La Senza concessions, Sharp said.
Sharp added: “This has been OK, bearing in mind that we have a higher percentage of outerwear in our product mix and that we had an unseasonably warm autumn.”
Menswear market share, conversely, had swelled by 20 basis points, while kidswear remained flat.
H by Henry Holland has been the best performing designer from the Designer at Debenhams offering across womenswear. The range will be rolled out to 132 of the business’ stores due to strong performance, Sharp added.
Across its estate, Debenhams will refurbish 18 stores in the second half, including works to replace escalators and air conditioning. This could impact sales in these stores by up to 10% while improvements are taking place.
The chain also opened three international stores in the period, helping boost international sales up 23.5%. New franchise stores opened in H1 include Hiraz in Iran and two stores in the Philippines, while stores to open H2 include Mumbai, Bangalore in India, and Karachi in Pakistan.
Debenhams is operating a total of 69 international stores in 25 countries and has ambitions to reach 130 stores globally through franchise by 2016/17, Sharp said.