Debenhams is on course to post a rise in profits for the full year, reporting strong online sales growth and market share gains in the crucial womenswear division.
The department store, which released a trading update for the 52 weeks to 1 September ahead of publishing its full year results next month, saw 2.3% growth in like for like sales, with a rise of 2.6% in total gross transaction value.
Online sales were up 40% during the period – ahead of the 13% market-wide rise. The store modernisation plan has also led to a 6% uplift in those branches completed during the year, with any completed two years ago providing a further 1.5% growth.
Debenhams has “grown or maintained market share in all key categories”, with womenswear up 20 basis points in the 12 weeks to 5 August – a period the department store called “a very difficult season”. This was thanks to improvements in its marketing under the “Life is Fabulous” campaign, and changing perceptions about the brand, it added.
International growth will also boost the bottom line, thanks to six new store openings and expansion in the digital delivery network, including the launch of the German website.
As a result, Debenhams is expecting to report gross margin growth of 30 basis points lower than 2011, but pre-tax profits ahead of last year and in line with previous guidance.
Chief executive Michael Sharp said: “I am delighted with our strong performance and the progress we have made in 2012. To deliver like-for-like sales growth in these extremely challenging market conditions is highly creditable and we achieved this result by relentlessly focusing on our customers.
“This performance is clear confirmation that our strategy to build a leading international, multi-channel brand is beginning to work. It is also evidence of the calibre of the team charged with delivering this strategy and I would like to offer my sincere thanks for the hard work of all 30,000 employees during the year.”
The business would continue to make progress into 2013, Sharp added.