Debenhams upbeat despite sales slip

Having seen improved trading in the autumn, the chain said like-for-like sales in the 19 weeks to January 8 were reduced by between 2.5 per cent and 3 per cent due to the snow, leaving same-store sales across the period 1.3 per cent lower on a year earlier.

Debenhams has stores in Leeds, York, Scarborough, Harrogate, Hull, Doncaster and Sheffield. Chief executive Rob Templeman said he was pleased with the festive performance, particularly as industry figures showed the company gained market share, including in men's and children's clothing.

He added that he expected the company to make progress over the coming months, despite remaining cautious about the strength of consumer confidence.

Matthew McEachran, a retail analyst at Singer Capital Markets, estimated the 3 per cent hit to sales caused by weather disruption cost the company in the region of 30 million in lost sales and 13 million in gross profit.

He said the underlying performance of the business and strategic changes meant Debenhams should be able to offset much of the damage over the remaining 33 weeks of its financial year.

Mr McEachran added: "In light of the snow impact, this is a decent performance from Debenhams and, now the snow has gone away, we expect performance on a cumulative basis to be gradually clawed back, albeit probably not entirely."

The group, which has 167 stores across the UK, Ireland and Denmark, has stripped back concession space in recent months to focus on brands including designer collections from Henry Holland and Ben de Lisi.

As part of its strategy to put margins ahead of sales, set out 18 months ago, Debenhams has also completed a series of store refits and openings, as well as developed online with initiatives such as a Debenhams app for the iPhone.

Despite the snow disruption, Debenhams said it anticipated that terminal stock left over at the end of February would be at an all-time low level.