Debenhams increased like-for-like sales in the 18 weeks to January 2 by 0.1% over last year, the department stores group announced today.
The company said the figure reflected the impact of lower sales densities resulting from its strategy of moving space away from concessions and into own-bought merchandise. This has reduced like-for-like sales by around1.5% since the beginning of the financial year.
Debenhams said that gross margin had been “particularly pleasing and has improved significantly over the corresponding period last year. The gross margin improvement has been achieved through our strategy of focusing on the drivers of cash gross profit, principally by repositioning our product offer towards a higher mix of own-bought ranges as well as lower markdown.”
The company also said that it would be accelerating its store refit programme as well as investing in more brand makeovers across the whole store portfolio.
Chief executive Rob Templeman commented: “We are pleased with our overall performance in the first 18 weeks of the year which was in line with our own forecast. 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.”
However, he warned that with the rise in VAT and a general election pending, the consumer environment “remains uncertain and difficult to predict”.