Total sales at Debenhams rose 6.3% but like-for-likes dropped 4% in the 19 weeks to January 13. The company is blaming its acquisition last year of nine Roches stores in the Republic of Ireland, which have relatively low-margin stock.
Meanwhile, the department store group, which was re-floated by its private equity owners last year, has been heavily criticised by bank Goldman Sachs. It ranked Debenhams bottom in a league table of nine European clothing chains.
Goldman Sachs pointed the finger at “under-invested stores, uncompetitive prices, cost cuts affecting service standards and a high level of promotional activity damaging the brand”.
The retailer denied that its promotional Megadays devalued its reputation, saying it had done no more activity this year than last.