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Sales rise at Debenhams but margins are knocked

Department store group Debenhams has reported a strong rise in sales after making the most of red-letter periods such as Easter and the Queen’s Diamond Jubilee, however gross margin was affected by a shift in the sales mix because of wet weather.

Debenhams reported gross transaction value up by 3.9% in the 16 weeks to June 23, bringing the advance for the 42 weeks to that date to 2.2%.

Like-for-likes, excluding VAT, rose 3.1% and 1.2% respectively.

The retailer said that it had successfully met customer needs “especially around key events when footfall has been at its highest such as Easter, Mother’s Day, the Diamond Jubilee and month-ends.”

Group gross margin, which had previously been anticipated to be flat, will now be 30 basis points below last year.

Online sales advanced 34.9% over the 16 week period and mobile now accounts for 30% of website traffic.

Debenhams chief executive Michael Sharp said he was comfortable with full-year profit expectations.

He said: “We have continued to make good progress and I am particularly pleased with the like-for-like sales trends in the second half of the year. 

“Looking forward, there is little sign of an imminent recovery in consumer confidence. Our focus for the remainder of this financial year and into next year will therefore be the remorseless execution of the four pillars of our strategy which we believe will bring success irrespective of the wider economy.”

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  • D for Debenhams, D for discounting...

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