UK: Debenhams gains market share despite H1 profit slump
Department store retailer Debenhams gained market share in its core clothing categories despite unveiling a 12.6% first-half profit decline to GBP94.1m (US$184.9m).
The company said its trading followed the general retail picture across the UK in the six months to 1 March, with weak trading either side of a relatively buoyant Christmas and January sales period.
Interim sales for the six months were up 1.2% to GBP1.3bn, but like-for-like sales edged down 0.7%, with January and February particularly difficult, the company said.
Pre-tax profit including write-offs dropped 12.8% to GBP92m. Debenhams said the recently introduced spring/summer clothing ranges were proving popular, while its Designers at Debenhams ranges "continue to move forward across all departments".
Market share gains in women's wear were particularly strong in formal wear and occasion wear, while the company's men's wear had improved its performance markedly thanks to price adjustments, as well as improvements to the design and quality of ranges.
Debenhams also hailed the "extremely strong" sales performance in its newly introduced Baker by Ted Baker children's wear range, introduced last September.
Debenhams Direct, the company's online business, also showed good growth, with visitors and sales up 58% and 81% respectively in the period.
"Against the backdrop of a tough retail marketplace, 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," said Rob Templeman, Debenhams chief executive.
"We expect the trading environment to remain challenging, so we will continue to focus on the areas of our business that are within our control: making further improvements to our own bought products and providing customers with a pleasing shopping experience."
However, Debenhams said that sales for the 32 weeks to 12 April were up only 0.8% on last year, and down 1% on a like-for-like basis. Gross margins had also fallen, the company added.
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