Debenhams results “in line with expectations”

Department store chain releases trading update for 2009, revealing expected increase in profits, driven by own-bought ranges.

Debenhams results 'in line with expectations'

Debenhams today released a trading update for its financial year 2009. Preliminary results for the full year will be released next month.

According to the report, sales were up 0.2% for the year to August 29, compared with the previous 12 months, while the company stated that, “pre-tax profit and EBITDA for the financial year are expected to be ahead of last year and in line with management’s expectations”.

Like-for-like sales for the second half of the year were 3.8% lower than 2008, compared with a decline of 3.6% for the year. The company claimed that “disruption to sales” in the latter part of the second half was caused by “the largest space moves in Debenhams’ history”, with 530,000 sq ft of trading space being converted from concessions to own-bought ranges.

The retail chain also introduced a number of new brands and departments. However, the shortfall in sales was offset by a strong gross margin performance, up 70 basis points for the year.

The Designers at Debenhams and own bought ranges saw good growth and were the best performing categories, driving Debenhams’ gross margin gain.

Debenhams chief executive Rob Templeman said: “Our sales, margin and profit during 2009 is pleasing. We believe that the increase in profits in a year, which has seen some of the most difficult and volatile trading conditions in recent times, is a credible performance.

“Looking to the new financial year, it will be difficult to predict consumer behaviour. Although it is early days, we are encouraged by the launch of our new brands, which we expect to benefit gross margin during the course of the year.”

Debenhams opened five new department stores in the UK during 2009, creating 800 new jobs.

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