Debenhams’ first-half performance was “pleasing given the difficult trading environment”, the retailer said this week.
In a trading update for the 26 weeks to February 26, the department store group revealed that gross transaction value increased by 3.2% over the previous year, although like-for-like sales were flat including VAT and down 1.5% excluding VAT.
The retailer said it had been able to offset some pressures on gross margins by its focus on the drivers of cash margin, in particular the own-bought sales mix and markdown management. It said it also expected terminal stocks at the end of the half year to be at an all-time low. As a result, gross margin increased during the first half over the previous year. In addition, first-half pre-tax profit is expected to be ahead of last year.
Debenhams said that its plans to create a truly integrated multi-channel business continued to move forward, with sales from Debenhams Direct surging 82.4% during the first half of the year. The retailer has focused on improving multi-channel access points with the launch of the iPhone app and Debenhams TV, and rolling out self-service order kiosks to more stores.
A new department store opened in Wakefield during the period, and the second half will see one launched in Fareham.
Commenting on the first-half figures, chief executive Rob Templeman said: “Our performance in the first half has been pleasing given the difficult trading environment.” But he warned: “Looking forward, it is clear that disposable income is under pressure from inflation, public sector spending cuts and higher taxation. As a result, trading across the UK high street is likely to be difficult in the second half of the year.”