Debenhams is upbeat despite volatile trading
Debenhams said it will hit City expectations for this year, despite yesterday posting its weakest sales for more than two years and reporting "volatile" high street trading in its third quarter.
The department stores chain also revealed that it will create 430 new and temporary jobs at its flagship store in London's Oxford Street before Christmas, as part of a £25m refurbishment that will see it open a new restaurant and café, and add a floor of selling space.
Michael Sharp, the chief executive, said: "The market place has been very challenging, whether it be the very cold weather or the consumer backdrop. In that context, we have delivered a robust performance. I am particularly pleased with the growth in market share in key categories, which is a clear manifestation that customers are liking what we are doing."
Mr Sharp said Debenhams had gained market share in its menswear, womenswear, homeware and premium beauty departments. But he admitted that it had lost a 0.1 per cent share in childrenswear, which he blamed on allocating more space to other categories.
The impact of the sun coming out on its weekly trading could be seen in Debenhams posting underlying sales down by 22 per cent during a cold week in early March and a 16 per cent leap in a warm mid-April.
Debenhams delivered flat like-for-like sales over the 16 weeks to 22 June, following eight consecutive quarters of growth. This was lower than analyst expectations of an uplift of up to 2 per cent, and a marked slowdown on 3.1 per cent growth in first half.
Total sales rose by only 1 per cent but online revenue boomed by 40 per cent in the third quarter. This helped Debenhams boast that it will meet City expectations of pre-tax profits of between £150m and £157m, compared with the £158.3m delivered last year.
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