Debenhams defies high street sales gloom

Debenhams, the privately owned department store group, unveiled plans yesterday to spend £18m on revamping the eight stores it acquired from Allders.

Debenhams, the privately owned department store group, unveiled plans yesterday to spend £18m on revamping the eight stores it acquired from Allders.

The company, acquired by CVC Capital Partners and Texas Pacific in 2003, revealed it was grabbing market share from rivals such as House of Fraser as it brushed aside the high-street slowdown. Rob Templeman, the chief executive, said: "It has tightened up out there but if you have the right products customers will buy them. We have got growth across all our product categories."

Underlying sales rose 2.7 per cent in the 13 weeks to 26 February and by 4.2 per cent during its first half. The most growth came from exclusive designer ranges, which include collections by Matthew Williamson and John Rochas.

Despite Debenhams' strong performance, Mr Templeman denied speculation that the group was planning a swift return to the public equity markets. "The board has not given the go-ahead for a flotation. We have got a lot of growth to come from the business," he said.

Debenhams has outlined ambitious expansion plans, which include trialling a "mini" department store focusing on women. It expects to open up to 40 full-size department stores over the next four years in the UK and a number of mini stores. It is refurbishing its estate, including its flagship Oxford Street site, and revamping the eight former Allders stores.

Trading profits for the six months to the end of February jumped by 64 per cent to £152.2m, while there was a 270 per cent surge at the pre-tax level to £162.2m. The company boosted its margins by 3.6 percentage points thanks to selling more of its Designers at Debenhams collections and driving down its terminal stock (the amount of last season's clothes left over) levels to just 2 per cent from 12 per cent.

Mr Templeman said the company would reinvest the margin gains in improving quality rather than drive down prices.