DEBENHAMS yesterday buoyed the retail sector as it said it was on target to meet forecasts despite economic headwinds.
The chain forecast first half pre-tax profit in line with a market consensus of about £128m but said trading across the high street was likely to be difficult in its second half.
Like-for-like sales in the six months to 26 February were down 1.5 per cent, as consumer spending came under pressure from an increase in VAT.
Debenhams chief executive Rob Templeman said: “We believe that our focus on driving cash margin rather than just chasing sales will continue to benefit our P&L (profit and loss) over the next few years.”
Templeman said he expected clothing prices across the high street to rise six to eight per cent this year as input cost inflation was passed on.
“In the short term, we believe retailers are not going to get much help from the macro-economy,” he added.
The firm said it would invest in new store openings and store refits, as well as growth online and overseas.
Last week a survey showed retail sales in February fell at their fastest annual pace in ten months. Debenhams trades from 166 stores in Britain, Ireland and Denmark and about 60 franchised outlets in 23 countries.
Debenhams’ shares closed lower yesterday, ending 1.1 per cent down at 58.05p.