Debenhams lures shoppers and investors alike

Despite starting the week with losses Monday, the FTSE 100

remained above 6,000 after the strong rally at the start of 2013. The British benchmark index was in line with other European stock markets, which remained flat. Big news was Germany´s exports slowdown.

In the UK, Debenhams reported record December sales, thanks to a 5 percent increase in comparison with last year. However, the improvement wasn´t enough for Seymour Pierce´s analyst Kate Calvert, who noted ‘nullifies the better sales performance’. Shares dropped nearly 6 percent to 110 pence in the early trading hours. Investors hurried to sell shares, sending them down 6.5 percent before lunch, to 109 pence, reported ‘The Guardian’. Debenhams shares almost doubled during 2012.

The department store chain announced "good sales momentum" in the 18 weeks to January 5, with like-for-like sales up 2.9 percent, reported Reuters. "With Christmas falling on a Tuesday this year, it was widely expected that customers would focus their shopping activities later in the season and this proved to be the case with Debenhams," the group said in its interim management statement on Tuesday.

Surprisingly and contrary to the record sales achieved in December, the group has preferred to remain cautious about the immediate future and downgraded its forecast for gross margin in 2012, due to the prominence of promotions in the run up to Christmas. Debenhams said it now expects gross margin for 2012 to be 10 basis points higher than the previous year, rather than 20 basis points as previously forecast.

Michael Sharp, chief executive of Debenhams, said consumers have become acclimatised the "new economic reality", so as a result he did not expect a "significant change" in consumer confidence in 2013.