Debenhams delivers solid half-year profits

The struggling high street giants Debenhams and Mothercare have managed to wean themselves off the allure of promotions with few side effects after both posted strong sales despite offering fewer discounts.

The department store chain Debenhams continued its strong momentum from Christmas, after years of struggling with profit warnings, to see sales for the six months to end of February rise 1.7 per cent to £1.1m, with pre-tax profits rising 4.3 per cent to £88.9m.

This was despite the retailer reducing the number of promotional days by 14 during the period, and cutting back on discounting in areas such as cosmetics.

Its chief executive Michael Sharp said: “It’s not about ending promotions, but being more focused and removing events that create noise but don’t create value.”

Like-for-like sales rose 1.3 per cent, however, these were flattered by its Springtime Spectacular launching a week earlier this year compared with last. The event accounted for 1 per cent of the sales increase, or about £3m profits.

Meanwhile at Mothercare, its chief executive Mark Newton-Jones remained cautious over the mother and babywear retailer’s future, despite recording four quarters of consecutive growth in the UK for the first time for five years.

Sales in the UK rose 5.1 per cent in the 11 weeks to the end of March, meaning full year like-for-like sales were up 2 per cent on last year, despite drastic cuts to the amount of discounting.

Mr Newton-Jones said: “It’s very early days. We’re still turning the business around.”

More focus has been placed on higher-end and exclusive products.

Shareholders were impressed, with Mothercare closing up 6 per cent at 224.75p and Debenhams up 6.7 per cent at 84.9p.