Debenhams posted headline pre-tax profits down 12.4 per cent to£94.1 million on sales 1.2 per cent up to£1.30 billion. Like-for-likes slipped 0.7 per cent over the interim period and by 1 per cent including the first six weeks of the new financial year.
Chief executive Rob Templeman said: “Against the backdrop of a tough retail market, I am pleased with our sales performance for the first half relative to the sector, which has resulted in market share gains across our core clothing categories.”
The Debenhams chief added that “given the present retail climate and the uncertain macroeconomic outlook”, action would be taken to “achieve a significant reduction of gearing over the next few years”.
Measures will include cost reduction, managing capital expenditure dependent on trading conditions, better working capital efficiency and “reductions in stock density through faster stock turn and reduced markdown”. Debenhams is also rationalising its brand portfolio, which will reduce stock density in the second half.
Templeman said that womenswear market share gains were particularly strong in formalwear and occasionwear. The menswear performance was “markedly improved, with adjustments to the price architecture and improvements to the design and quality of ranges resulting in the recovery of market share lost last year.”
Landsbanki analyst Charles Nichols said: “There may be some relief that Debenhams has delivered in line with expectations, particularly as the BRC suggests that March was very difficult.”