Debenhams saw record sales in December

Debenhams saw record sales in December

UK department store operator Debenhams has reported record sales in December, with promotions helping to lift like-for-likes by 5% but eating into profit margins.

The retailer attributed the sales growth to increased promotional activity in the run-up to Christmas - but now forecasts full-year gross margin to rise by ten basis year-on-year, instead of the previously expected 20 basis points.

For the 18 weeks to 5 January, like-for-like sales rose 2.9%, while online sales were ahead of expectations, jumping 39%.

Modernised stores continued to perform well, the group said, with the 18 stores completed last year delivering sales increases in line with historical performance.

The company added that it remains on track to grow its international franchise stores to 150 over the next five years. During the 18 week period, the group opened five new stores - taking the total to 73.

CEO Michael Sharp said: "I am pleased with our performance in the first four months of our financial year."

However, the trading environment was extremely challenging, Sharp emphasised. 

"We continue to believe that whilst consumers have become acclimatised to the new economic reality, we don't anticipate a significant change in consumer confidence in the remainder of the year."