Debenhams chief to retire as profit rises

Debenhams said its chief executive of eight years would retire in September as it posted a 4.5 per cent rise in first-half profit and resumed its dividend.

The firm said Rob Templeman would be succeeded by Michael Sharp, the current deputy chief executive.

Templeman will remain as a consultant for up to one year after his retirement.

Debenhams, which trades from about 170 stores in Britain, Ireland and Denmark and about 60 franchised outlets in 24 countries, said it made an underlying pretax profit of £129.2m in the six months to 26 February.

That was slightly above analysts' consensus forecast of £128m and up from £123.6m in the same period last year.

Debenhams, ranked second after employee-owned department store John Lewis, said first-half sales rose 3.2 per cent, with sales at stores open over a year down 1.5 per cent excluding VAT sales tax, and gross margin up 30 basis points.

The firm, which ended the period with net debt of £351.6m, returned to the dividend list for the first time in three years with a 1 pence payout.

Although Debenhams, in common with a raft of other British retailers, expects trading in its second half to be difficult as disposable incomes come under pressure from inflation, government cuts and higher taxes, it said it was planning for no real change in consumer confidence.

Prior to Thursday's update, shares in Debenhams, which returned to the stock market at 195 pence in 2006 after two and a half years in private equity hands, had lost 17 per cent of their value over the last year.