Like-for-like sales at Debenhams dropped 3.3% for the 12 weeks since October 21, as the department store reported a robust performance over over the Christmas trading period.
Debenhams said that the like-for-like sales drop was an improvement on the 4.2% fall over the the first six weeks of the financial year. It added that gross transaction value rose 1.1% over the 12 week period compared to last year, and that gross margin year-to-date was flat.
Debenhams’ like-for-like sales for the 18 weeks to January 3 were down 3.5%.
However profit-before-tax and EBITDA were up on last year, boosted by the higher transaction value and tight cost management.
Debenhams said that it continued to see strong market share gains across all categories.
Stock levels have closed 7.3% lower than last year for the period, representing a stock density reduction of 13.4%.
Own bought product sales have grown faster than sales via concession partners, with the Designers at Debenhams ranges making a strong contribution to market share gains.
However, chief executive Rob Templeman said the first part of 2009 was likely to be challenging.
Templeman told Drapers this morning: “Trading since Christmas has been good and there are signs that the consumer might have it a little better, with a possible drop in interest rates, but there’s not doubt it will be challenging.”
He added that Debenhams was well placed to cope with the tough trading environment.
“Debenhams has always been a promotional business and will always be. The customers like it and it delivers market share growth. We’re managing costs tightly and getting better value from products and the cold hard fact is that gross margin is still flat,” Templeman said.
Templeman said that the company had hedged currency until March 2010. It hedged for 18 months in September.
Templeman said: “We tend to hedge further ahead than a lot of retailers and that gives us a competitive advantage. It’s not just about currency though, as things like container costs are down.”
Debenhams will also put new spring product in store next week, a week earlier than last year.
To read a full interview with Rob Templeman click here.