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Sales flat at Debenhams as Sharp readies exit

Debenhams’ group like-for-like sales edged up just 0.2% for the 15 weeks to June 11, as “weak trade” hit the department store group ahead of chief executive Michael Sharp’s exit later this week.

Debenhams

Debenhams

In constant currency like-for-like sales slipped 1.6% on last year, while the group’s gross transaction value was 0.5% up on the same period in 2015.

Online sales were stronger however, up 7% for the quarter year-on-year.

Debenhams said that full year profit before tax will be within market ranges, despite the “volatility” of current trading.

Gross margin for the full year has been revised down to flat from previous guidance of flat to +50 basis points, while cost growth is expected to be at the lower end of the 2% to 4% increase expected on last year. 

Debenhams said it is keeping “costs tight, managing margin and driving cash generation” in response to the difficult trading environment.

Sharp, who will leave the business on June 24, said:

“Our strategy remains unchanged, with further progress in driving our non-clothing mix, continuing to improve service for multi-channel customers, and offering a wider choice of products and services in under-optimised space. In response to more uncertain trading conditions in this period, particularly in clothing, we have focused on managing stock and margins and generating cash.”

He added: “I am confident that I am leaving the business in the hands of a very strong management team, who will continue to execute our strategy and support our new CEO, Sergio Bucher, through the next phase of Debenhams’ development. Our wide product choice, clear destination departments and improving service proposition gives us a strong platform from which to deliver long term sustainable growth.”

Bucher joins Debenhams in October. 

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