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Debenhams looks to expand UK and overseas as sales rise

Debenhams is planning to expand its UK and international presence after reporting growth in sales and profits for the year to September 1.

The department store saw pre-tax profit rise by 4.2% to £158.3m over the year to September 1, with total sales climbing 2.6%. Like-for-like sales were up 2.3%.

The UK and international saw comparable growth of 2.6% and 2.7% respectively, while Debenham’s online sales rose 39.8%. This has given the business the confidence to increase its target for digital sales from £500m to £600m in the medium term.

On the back of what the retailer described as “strong sales”, Debenhams is now planning to open a further 17 stores in the UK over the next five years, with locations in Cheshire Oaks (Chester), Fort Kinnaird (Edinburgh), Beverley (East Yorkshire), Wandsworth (London), Scunthorpe (North Lincolnshire), Darlington (County Durham), Newport (Wales) and Shrewsbury (Shropshire) already identified. A total of 1,700 jobs will be created as a result.

Debenhams is also planning further international expansion by opening another 20 stores worldwide, including Bulgaria, Estonia, Egypt and Turkey, following the opening of seven stores in 2011/12, such as Pakistan and Russia.

Michael Sharp, chief executive of Debenhams, said: “I believe the strong sales momentum we achieved in the second half of 2012 is clear evidence that our strategy to build a leading international, multi‐channel brand is working and this has prompted us to be more ambitious with our medium‐term targets for the growth of our online and international operations.

“Looking forward, we believe that customers are acclimatised to the new economic reality.

Whilst we don’t anticipate a significant change in the economic environment in 2013, we expect to make further progress during the year. We will always manage cash, costs, stocks and margins closely but we are committed to continue prudent investment in key areas to deliver long‐term sustainable growth as well as further returns of capital to drive shareholder value.”

Within product, Debenhams today announced the launch of a new children’s designer range with Markus Lupfer joining forces with model Donna Air on a collection available from November 26.

The capsule collection comprises knitwear, sweatshirts, t-shirts and leggings for girls aged four-14.

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