Retailer raises online targets

Debenhams, the department stores group, raised its targets for online and international growth after showing its resilience to weak market conditions with a 4.2% rise in year profit.

The group said it had raised its medium-term target for online sales from £500m (€620m) to £600m and its five-year target for total franchise stores from 130 to 150.

Debenhams, which trades from about 170 stores in Britain, Ireland and Denmark, and over 60 international franchise stores, made a pretax profit of £158.3m in the year to Sept 1. That was slightly ahead of analysts’ expectations of £157.5m and up from £152m in the 2010-11 year.

Total sales increased 2.6% to £2.71bn, while sales at stores open over a year, excluding Vat, rose 1.6%.

Many retailers have been finding the going tough as disposable incomes are squeezed by government austerity measures and with wages’ growth not keeping up with rises in prices.

Debenhams has bucked the gloomy trend, helped by its breadth of products, broad range of customers, multiple routes to market and increased marketing spend.

The firm, which paid a full-year dividend of 3.3p, up 10%, said its share buyback programme would continue this year with up to £40m to be spent.

“Whilst we don’t anticipate a significant change in the economic environment in 2013, we expect to make further progress during the year,” said chief executive Michael Sharp.

Shares in Debenhams, up 59% over the last year, closed at 109p, valuing the business at £1.38bn.