Debenhams December delight

published 10 January 2012

Department store Debenhams was pleased with its Christmas trading performance, with like-for-like (LFL) sales including value added tax (VAT) up 6.5% in December on a year earlier.

Group gross transaction value for the 18 weeks to January 7th, 2012, increased by 0.5% from a year earlier. Group like-for-like sales increased by 1.4% including VAT and were level with last year excluding VAT. The rate at which VAT is levied was increased at the beginning of 2011.

The online business showed a clean pair of heels to the bricks and mortar side of the business in terms of growth, with like-for-like sales increasing by 34.8%.

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Warmer weather conditions through October and November had a detrimental impact on the sales of seasonal product lines, while uncertainty in the wider economy continued to have an adverse effect on consumer confidence.

Stock levels are firmly under control across all departments and terminal stock at the end of the first half is expected to be in line with historic levels, the company said. At this stage, gross margin guidance for the financial year (which runs to the end of August) is unchanged at flat.

"Looking forward, we are cautious about the strength of the economy and its impact on consumer behaviour over the remainder of the financial year," revealed Michael Sharp, Chief Executive of Debenhams.

"We are confident that the design, quality and value offered by our spring/summer 2012 product ranges will find favour with customers and expect to see some benefit from lower input prices in the second half of the year," Sharp added.