Weather helps Debenhams revival
Published 17/09/2013 | 10:11
Department store chain Debenhams said t he summer heatwave and surging online trade helped it return to sales growth after a dismal spring season.
Like-for-like sales lifted 1.9% in its final quarter to August 31 in a marked recovery after it failed to grow sales in a weather-hit March to June period.
Debenhams said the warmer summer weather was "helpful", but also hailed its online performance as sales leapt by 46.2% over the full year.
The fourth quarter turnaround helped same store sales rise 2% overall in the year to August 31.
Debenhams issued a profits warning in March due to the impact of January's snowstorms in what has been a volatile year due to weather conditions, but confirmed today it remained on track to meet City forecasts.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said Debenhams was now "back amongst the pack" following an impressive recovery in recent years.
It has increased its market share in fashion and online thanks to s tore revamps and the addition of a raft of new designers, including Hammond & Co by Patrick Grant - its first new designer menswear brand for 10 years.
Chief executive Michael Sharp said he was pleased with the performance " in a competitive market where consumers' disposable income remains under pressure".
Debenhams overhauled another 12 stores across its 236-strong chain over the year.
It is on schedule to complete the £25 million transformation of its flagship store on London's Oxford Street by December.
The group also said its gross profit margin is expected to be flat despite a fall in the first half and ongoing promotional sales.
Buoyant trade in its international business has added to the resurgent performance, with its Magasin du Nord chain posting a 6% leap in full-year like-for-like sales, as reported in sterling.
Shares rose more than 2%, but analysts cautioned that Debenhams will have to keep on top of its game as rival Marks & Spencer stages a fight-back, having recently launched a star-studded autumn/winter clothing launch aimed at turning around its womenswear sales.
Retail experts at N+1 Singer said the new ranges at M&S pose a "potential risk" to Debenhams.