Debenhams sales up despite fewer Christmas discounts

SALES at Debenhams increased this Christmas despite the department store discounting less items than the previous year.

The British-based retailer, which acquired the business and assets of nine Roches Stores outlets in September 2006 for €29 million, said a rise in the VAT rate in Britain and a general election there means trading will be uncertain in 2010.

It forecast a further rise in profit margin this year despite the tough economic outlook as it posted a small rise in sales and a profit increase in the run-up to Christmas.

In a similar strategy to Marks and Spencer, Debenhams said profitability was boosted this year by fewer price reductions compared with the same period last year.

Debenhams does not break down sales figures for its Irish shops but it will provide a further update on trading in April.

The chain said the 0.1% improvement in like-for- like sales for the 18 weeks to January 2 was in line with internal forecasts.

Chief executive Rob Templeman said: “Against the backdrop of a tough economic outlook we believe that focusing on self-help levers such as margin expansion alongside sales is imperative.

“Our continued focus on cash margin means that for the second year in succession we have delivered an increase in profit before tax over the Christmas trading period.”

The retailer is also stepping up its refit programme following a successful refurbishment project at its Cardiff store.

Debenhams put the programme on hold last year with 42 of its 144 department stores awaiting refurbishment.

It expects to complete four or five stores in the current financial year to the end of August.

The portfolio will be boosted in the coming weeks by the return of the Principles brand, which disappeared from the high street last year following the administration of parent company Mosaic Fashions.