Financial performance Debenhams

Department store Debenhams increased its gross transaction period over the 42 weeks to 19th June by 8.9% compared with the previous year including Magasin du Nord (“Magasin”) and by 1.1% excluding Magasin. Like-for-like sales decreased

by 0.4% over the 42 weeks. and continued to be impacted by c.1.5% by increasing the penetration of own bought trading space, which was predominantly undertaken in the fourth quarter of 2009, and by stronger comparatives in the third quarter of 2009.

Debenhams continued to make market share gains, particularly in menswear and childrenswear, which saw share gains of 20 basis points and 40 basis points respectively (source: Kantar Worldpanel Fashion 24 weeks market share data to 23 May 2010 vs. 2009). Womenswear share continues to be impacted by lower own bought sales densities. The department store further made progress against four key strategic themes: product strategy, multi-channel, new stores and store refurbishments and balance sheet.

The new designer collections Principles by Ben de Lisi and H! by Henry Holland have been well received by customers and performed in line with expectations. As part of Debenham’s strategy to increase own bought sales penetration, the company reached an agreement in principle to buy the Faith footwear concession business in Debenhams stores from the administrators of Faith subject to contract. There are 115 Faith concessions in Debenhams stores.

One department store has been opened during the second half in Carmarthen taking the current portfolio to 146 department stores, 13 Desire stores and six Magasin stores.  One further department store is scheduled to open before the end of the financial year in Bury, Greater Manchester in July.  In addition, six international franchise stores have opened in Azerbaijan, Egypt, Malaysia, Malta, Slovakia and the UAE during the second half with a further two expected before year-end.

The process of refinancing Debenhams’ debt facilities is progressing and the company expects this to be completed within the next few weeks, ahead of the scheduled date of April 2011.

Image: Debenhams