Department store Debenhams put rival Next in the shade today by beating the City’s sales expectations in the face of Britain’s sporting summer.
Online growth of 40 per cent and an improved share of the under-pressure womenswear market helped the chain report a 3.7 per cent hike in like-for-like sales excluding VAT in the ten weeks to September.
The update was more upbeat than Next, which recently admitted that August and September had been unusually slow, with womenswear particularly badly hit.
The performance, which marks an improvement on the previous 16 weeks, came despite the company’s earlier warning that the Olympics could disrupt trading.
But Singer Capital Markets analyst Matthew McEachran said Debenhams, which operates 164 stores in the UK and Ireland and its Magasin du Nord chain in Denmark, had ended its financial year on a high.
He said the group was benefiting from strategic initiatives such as its store modernisation programme, its Life Made Fabulous TV advertising campaign and overseas expansion.
He added: “We don’t believe that Debenhams experienced much of a drag, if any, from the summer Games.”
However, the group, which is seen as one of the most aggressive discounters on the high street, confirmed that gross margins for the year would be down 0.3 percentage points as it dropped prices amid fierce competition.
Chief executive Michael Sharp said: “To deliver like-for-like sales growth in these extremely challenging market conditions is highly creditable.
“We do not anticipate a significant change in the economic environment in the near future but we expect to continue to make progress in 2013.”
The retailer said profits for the year to 1 September will be in-line with City expectations and ahead of last year’s £157.7 million.