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Disappointing results for Debenhams

In its interim management statement today for the 19 weeks to 8 January 2011, the Group says that gross transaction value was up 4.2% but like-for-like sales were down 1.3% (ex VAT).

Investment in the multi-channel model continues to deliver strong growth with Debenhams Direct and the instore ordering service recording a sales increase of 88.5% during the period.

Magasin du Nord continued to trade well with like-for-like sales up 11.5% on a Danish kroner basis (up 5.5% on a sterling basis).
The company’s ongoing strategy to improve the participation of own bought merchandise and continuing focus on margin management means that Group gross margin is ahead of last year for the 19 week period.

In the most recently available data which covers the 24 weeks to 31 October 2010, Debenhams’ total market share increased by 10 basis points with men's clothing and children's clothing increasing by 30 basis points and 20 basis points respectively.

Over the next financial period, the Group has scheduled to open a department store in Wakefield and a Desire store in Fareham. One new franchise store has opened in Yerevan, Armenia and the medium-term target remains 100 stores.

Rob Templeman, Chief Executive of Debenhams, said,"The performance of our business year-to-date has been pleasing, especially given the widespread disruption in December caused by bad weather which undoubtedly impacted Group like-for-like sales by 2.5-3.0% over the 19 week period. We have made good progress in terms of both gross margin and market share and I am particularly pleased that our market share in women's clothing has begun to demonstrate growth.

"Looking forward, we are cautious about the robustness of consumer sentiment for the remainder of the financial year. Despite this, we have a clear strategy of self-help initiatives which focus on gross margin management, driving market share and growth through expansion and investment which we believe will enable Debenhams to continue to make progress over the coming months."

Source : The Retail Bulletin

10 January 2011
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