Debenhams targets M&S amid plans to dominate high street

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Debenhams, the department store group recently taken private, set its sights on Marks & Spencer yesterday as it signalled a more aggressive expansion programme.

Debenhams, the department store group recently taken private, set its sights on Marks & Spencer yesterday as it signalled a more aggressive expansion programme.

Michael Sharp, the chief operating officer, said there was "potential for significantly more" than the 20 new stores the group has already committed to open over the next four years. He said: "When M&S trades from more than 300 stores, you have got to ask yourself why Debenhams doesn't trade from more than it does."

The company, which has 107 stores, also plans to trial a new "mini-Debenhams" format, in market towns and city centres. The first of three trial sites will open in Truro, Cornwall, in the spring, with a second tipped to open in London. The mini stores will be between 15,000 and 20,000 square feet and stock mainly women's clothing.

The group, run by Rob Templeman, also intends to add an extra 40,000 square feet to its Oxford Street store as part of a £6m makeover. The additional space will come from converting two floors of offices; the staff will move into its head office, located behind Oxford Street.

Debenhams, which was acquired for £1.72bn by a private equity consortium, brushed aside fears of a high-street slowdown as it revealed a sharp rise in profits. Chris Woodhouse, the finance director, said underlying sales were rising "well ahead" of the 2.5 per cent growth achieved in its second half.

The group said pre-tax profits for the year to 28 August had more than doubled to £300.5m, boosted by one-off property sales, which netted £160.5m. Trading profits rose 14 per cent to £184.7m. It has returned £130m to shareholders, helping to pay off some of its £600m deep-discounted bonds. Its debt has fallen to £856m, from £1.4m, Mr Woodhouse said.

Despite speculation the group is gearing up for an imminent reappearance on the stock market, Mr Woodhouse said: "It's far too early for that."

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