Debenhams is boosted by its own products

HIGH Street stalwart Debenhams yesterday said first half profits will beat those from last year despite the “challenging” backdrop and the snow disrupting shoppers.

The department store group, which operates 158 stores in the UK and Ireland, said its focus on own bought products had boosted profit margins but slightly knocked sales growth.

Like-for-like sales climbed 0.3 per cent in the 26 weeks to 27 February. This is up from 0.1 per cent after 18 weeks.

The FTSE 250-listed retailer added it has boosted its market share in menswear and childrenswear. However, the shift from concessions to own bought ranges knocked the performance of its womenswear division.

Following the revamp of many of its store layouts it now has around 150,000 square foot of space to promote its own brands.

During the period, Debenhams also opened four new stores, including the new flagship department store at the Eldon Square shopping centre at Newcastle-upon-Tyne and three new “Desire by Debenhams” stores at Kidderminster, Monks Cross and Witney.

Its presence has been extended into Iran and Vietnam through franchise businesses.

Meanwhile, the online retail environment continues to thrive with internet sales climbing by more than 80 per cent in the first half.

Chief executive Rob Templeman highlighted Debenhams higher profit margins compared to last year.

“In 2009 we were 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,” he said.