Debenhams reports rise in sales
Debenhams has seen like-for-like sales including VAT for the 17 weeks to 25 June rise by 1.5%
The department store chain which has 169 stores in Britain, Ireland and Denmark, said it was gaining market share and would meet expectations for pre-tax profit of about £158 million for 2011-12.
Debenhams said that sales in the period had been boosted by the so-called lipstick factor where cash-strapped shoppers choose to spend any spare money they have on smaller, luxury items such as makeup and skincare products.
Chief Executive Rob Templeman said: "It's probably one of the most resilient areas in the market, health and beauty. Everybody calls it the lipstick factor, that people still buy health and beauty whatever."
He added that recent additions to the Debenham’s fashion lines had also performed well. These include Principles by Ben de Lisi and H! by Henry Holland.
Debenhams said the stronger sales seen during the last few weeks had been achieved in part through more discounting. This meant that full-year gross margin guidance would be lowered from 10-20 basis points to flat.
Templeman commented: "We are continuing to make progress despite significant headwinds in the sector and are pleased with the performance of the business in the year so far. Looking forward, we remain cautious about the consumer environment and will continue to focus on growing cash margin through our self-help strategy of investing in our store portfolio, developing a seamless multi-channel business and managing our supply chain effectively."
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