Debenhams has reassured suppliers that there are no plans to alter terms and ask for extended payment periods.
Chief executive Rob Temple-man, who rushed out a trading statement this week amidst rumours of poor trading, denied reports that the department store chain had extended its payment terms to 96 days and asked suppliers for greater discounts.
Templeman said: “There was speculation that we were down 9% or so, and that we’d changed suppliers’ terms, but they are no different to before, which is on average 60 days.
“There are no issues with credit insurance either – we’re a very cash-generative business.”
The business, which saw its share price plummet to a record low on Monday, said like-for-like sales at Debenhams rose 1% for the 10 weeks mid-April. Sales for the 42 weeks ended June 21 were ahead 1.3% but down 0.6% on a like-for-like basis.
Templeman predicted that the business would take more market share from its rivals as tough trading continued into the second half of the year.
“We will continue to invest in the quality and value of the product,” said Templeman. “Christmas and the run-up will be tough and the thing to do is to take more market share.”
Templeman added that the Liverpool store, which opened last May, had performed above expectations and was the firm’s fifth best-performing store.
“The store has done very well on own-bought product,” said Templeman. “A lot of shoppers have said to us how much they liked the new product, but it’s not new, it’s actually the way it is merchandised.”
He added that new stores in Dunfermline in Scotland, Blackpool and London’s White City would use a similar approach.
Own-bought and designer ranges performed particularly well. Gross margin for the year is expected to be between flat and plus-20 basis points.
The company has appointed Sarah Savva as its new head of external business to replace Mike Cousens, who retired last month.