Department store group Debenhams has reported a like-for-like sales fall of 0.4% for the 42 weeks to June 19 and has agreed to buy bust footwear retailer Faith’s concessions.
The sales performance was affected by the retailer’s shift to own-bought lines, which pushed the like-for-like figure down by approximately 1.5% but delivers higher margins.
Gross margin this year is expected to be up 80 basis points and flat including recently acquired Danish chain Magasin du Nord.
Debenhams said it made market share gains in menswear and childrenswear of 20 and 40 basis points respectively. The retailer reported: “Womenswear share continues to be impacted by lower own-bought sales densities.”
Gross transaction value rose by 8.9% in the period. Excluding Magasin du Nord, the rise was 1.1%. Multichannel sales rose 90%.
The retailer said a deal has been agreed “in principle” to acquire the Faith operations from its administrators. There are 115 Faith concessions in Debenhams shops.
Debenhams chief executive Rob Templeman was pleased with performance and said: “2010 has been a year of change for Debenhams and a year when we will judge the performance of the business on profit improvement.”
He said: Looking forward across the balance of the year, we remain cautious about the strength of the overall retail market and the level of consumer confidence.
“However, we believe that our focus on self-help levers – including increasing gross margin through higher own-bought sales penetration, the recent acquisition of Magasin du Nord, our growing multichannel business and the ongoing store refurbishment programme – will help to mitigate the macro-economic pressures and enable Debenhams to make further progress over the coming year.”