ref="http://www.cityam.com/company/debenhams">DEBENHAMS yesterday said that its pre-tax profit for the year would rise 20 per cent – thanks to rising online sales and the performance of its designer ranges.
The company suggested profit would hit £150m as its discounting and store expansion helped to fuel figures £3m above analysts’ forecasts.
However, sales at stores open at least a year were flat compared with the previous 12-month period.
The upbeat estimates, which cover the year to 28 August, come in an unsteady consumer environment with a VAT hike on the horizon, a massive jobs cull in the public sector looming and rising prices of materials including cotton.
Debenhams deputy chief executive Michael Sharp said that despite a “challenging” situation the store was well placed to ride out the storm.
“The VAT rise is obviously an issue for retailers. But we are doing well by offering the right products at the right price for our customers.
“Online sales have been very important for us.
‘That’s the way many customers want to buy these days.”
Debenhams is the UK’s second largest retailer behind John Lewis for sales, with 160 stores in Britain and Ireland, six in Denmark and 60 franchised outlets overseas.
The company was also on track to make a profit at its recently acquired Danish chain, Magasin du Nord.
Sharp said the company saw a sales lift from a recent round of price slashing which saw up to 25 per cent knocked off the price of some ranges and he would not rule out more offers.
He added: “We are always looking to offer the best value to our customers.”
The company said its Designers at Debenhams range was performing particularly well with profit margins improving over the period. Homeware has also improved, it said.