Debenhams set to post higher profits

Department store chain Debenhams today said it expected to deliver a rise in annual profits, despite a revamp of its shops hitting sales.

Like-for-like sales in the six months to August 29 fell 3.8% as the company converted large areas of its outlets from concessions to own-brand ranges.

Debenhams said cost controls and better stock management kept it on course to meet profit expectations for the year to the end of August, even though it faced “difficult and volatile trading conditions”.

The group said Designers at Debenhams, including products from Jeff Banks and John Rocha, and its own-bought ranges were the best performing categories as it continued to achieve market share gains.

Debenhams has converted 530,000 sq.ft of trading space from concessions to own-bought ranges, introducing a number of new brands and departments. It added that the initial reaction of customers to the moves had been positive.

Chief executive Rob Templeman described the company’s sales, margin and profit performance during 2009 as pleasing.

He added: “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 creditable performance.”

At the start of the company’s new financial year, Mr Templeman said it was be difficult to predict likely consumer trends.

The company created around 800 jobs after opening new stores at Livingston, Great Yarmouth, the Westfield centre in London, Wrexham and Bury St Edmunds.

It currently has 144 department stores and 10 smaller Desire stores.