Volatile trading affects like-for-likes
The UK's second-biggest department store chain Debenhams has revealed that trading is 'volatile' and like-for-like sales fell 4.2 per cent in the last seven weeks.

Debenhams chief executive Rob Templeman blamed recent 'unseasonably warm weather', but for the 52 weeks to September 2 pre-tax and pre-exceptionals profit rose 67.9 per cent to£112.8 million.

However, when exceptional items in the company's preliminary results, such as a£14.1 million increase in rent, were added pre-tax profit fell almost 30 per cent to£62.1 million.

Panmure Gordon analyst Philip Dorgan said: 'There are so many adjustments to make that you can come up with any number you want.'

Debenhams - which re-listed on the stock exchange in May this year at 195p a share - remained bullish on future trading and said that it expected margins to 'continue to improve during the year'.

Templeman said that although annual like-for-like sales had slowed from 2.8 per cent to 0.5 per cent the introduction of ranges by Julien Macdonald and Jeff Banks would bolster sales growth.

He said that June had been 'adversely affected' by a delay in the launch of the traditional summer Sale, the hot weather and the World Cup.

The retailer - which is second after Marks & Spencer in the league of UK department stores - reiterated plans to almost double the number of stores it owns in the UK and Ireland from 137 to 240.

Templeman said that the recent completion of a 700,000 sq ft (65,030 sq m) distribution centre in Peterborough, at a cost of£27 million, would help the expansion drive.

Debenhams aims to increase its international franchises from 30 to 70 by April 2011. It has also spent£7 million in the past year developing its web site to try to capitalise on the e-tailing boom.

Broker Goldman Sachs said that it was 'negative' on Debenhams' growth prospects because 'sustainable LFL sales growth will be difficult to achieve owing to high entry point prices, low refit cost and as further cost reductions may impact service standards'.