Debenhams profits to beat forecasts

DEBENHAMS said yesterday it expects profits to beat forecasts despite flat sales in the year to 3 September.

Sales ­– excluding the effects of new store openings and the VAT rise – fell 0.3 per cent over the year, the company said.

However, group like-for-like sales rose by 0.4 per cent in the last nine weeks of trading.

Despite underlying sales having fallen slightly for the year as a whole, Debenhams said its market share grew in all product categories.

Chief executive Michael Sharp (pictured), in his first set of results since taking the reins from previous boss Rob Templeman, said the company had performed strongly against tough comparatives.

“We believe our decision to maximise cash profit by investing in top line growth has proven successful and this will result in headline profits before tax for the year coming in ahead of consensus forecasts,” he said.

Markets had been expecting a five per cent profit rise for the year, to £158m.

Danish subsidiary, Magasin du Nord, is seen as one of the retailer’s success stories. Debenhams said sales have risen 4.8 per cent since it bought the business in November 2009.

Online sales helped drive up total non-store “multi-channel” sales by 72 per cent during the year.

The department store started its summer sales five days early.

Meanwhile, British Land confirmed that it had pre-let space in central London to Debenhams for its new headquarters. The Regent’s Place office is under development, with completion expected in the summer of 2013.