Department store group Debenhams has posted higher than expected interim profits after strong performances from its own-bought ranges and market share gains.
The retailer reported an 18.6% increase in profit before tax and exceptional to £123.6m on sales up 8.4% to £1.42bn in the half-year to February 27. Like-for-likes in the 31 weeks to April 3 rose 0.3%.
Debenhams chief executive Rob Templeman said the business had “consistently achieved growth in sales, margins and trading profits” during the recession and that the trading environment would be “broadly neutral” in the second half.
He said: “We believe that the work we have done to improve our own-bought ranges, including Designers at Debenhams, both in terms of product design, quality and value and increasing the own-bought mix, will continue to find favour with customers and provide a solid platform for margin expansion and market share growth.”
The retailer reported that the latest Kantar Worldpanel fashion data showed its total market share in clothing, footwear and accessories was “stable”. Debenhams increased its menswear market share by 20 basis points and childrenswear by 40 basis points.
The retailer has been focusing on own-bought products, which deliver higher margins from lower sales densities. Debenhams said that womenswear market share was “impacted by the move into lower sales density own-bought ranges and the ongoing underperformance of some of the remaining concessions”.