Debenhams increased sales, pre-tax profit and gross margin in the 26 weeks to the end of February, the retailer said today in a trading update.
The department store group reported that gross transaction value – excluding Danish department store chain Magasin du Nord, which it bought in January – was 1.7% higher than in the same period last year, while like-for-like sales increased by 0.3%.
Gross margin in the first half was significantly higher than last year as the retailer focused on the drivers of cash gross profit – mainly careful stock control and a higher own-bought mix. The company has significantly re-jigged space in stores to bring in new and expanded own-bought brands and reduce concession space, and says that higher own-bought margins more than offset lower own-bought sales densities.
EBITDA and profit before tax for the first half are both expected to be higher than last year.
Debenhams opened four new stores in the first half: the 128,000sq ft flagship department store in Eldon Square, Newcastle-upon-Tyne last month February and three new Desire by Debenhams stores.
Chief executive Rob Templeman said that in 2009 Debenhams was “one of only a handful of retailers to increase sales, margins and profits and we have done so again in the first half of 2010. Against the backdrop of challenging trading conditions, we have delivered profit growth on a consistent basis for the past 18 months.”