• Interim profits up 5.5%
  • Like-for-likes ahead 1.1%
  • Search for new chief executive “well advanced”

Department store group Debenhams has posted a rise in first-half earnings as strategic initiatives bore fruit.

Debenhams reported a 5.5% increase in pre-tax profits to £93.8m on the back of a gross transaction value advance of 1.6% to £1.63bn.

Like-for-likes were up 1.1% in the period to February 27, when gross margin improved by 20 basis points.

The retailer said that progress made on strategic priorities resulted in “a strong trading and operational performance over peak” and that full-year results are expected to meet market expectations.

Debenhams has scaled back discounting, which led to a 5.1% improvement to the full price sales mix.

The retailer has also been bringing down stock levels and said that terminal stock, standing at 2.9%, was “in line with our long-term average”.

Stores have been reconfigured and “over 50% of targeted space now filled with new brands, formats and services”, Debenhams said. The proportion will reach 75% by Christmas.

Debenhams chief executive Michael Sharp, who will stand down later this year, said: “A strong operational performance resulted in a record Christmas, and further growth in first-half profits against a good performance in the prior year.

“Our customers are responding positively to our multichannel strategy, finding our mix of products and brands both compelling and great value for money.

“Although there is plenty more to do, we are on track to deliver full-year results in line with market expectations.

“When I leave the business later this year I am confident that it will be in a good position to deliver continued sustainable growth under a strong and capable management team.”

Debenhams said its search for a successor to Sharp was “well advanced”.