Debenhams trading update
Monday, 20 September 2010
The future looks bright according to the full year trading update of department stores group Debenhams stating its gross margin performance before tax is expected to be £150 million, an increase of some 20% over last year and up over 35% on
a two year comparison. The trading update covers 2010 financial year comprising the 52 weeks to 28 August 2010.
Besides increasing its gross transaction value for the year by 9.6% compared with the previous year including Magasin du Nord and by 1.4% excluding, Debenhams gained market share. Market share gains were achieved throughout the year in menswear and childrenswear (source: Kantar Worldpanel). Womenswear share was impacted in 2010 by lower own bought sales densities arising out of last year's space moves.Throughout the year, Debenhams focused on key strategic aims around the areas of product strategy, space expansion, multi-channel development and balance sheet management. The company launched several new brands including Principles by Ben de Lisi and H! by Henry Holland, and two new Designers at Debenhams collections both in the Home department; house and Home by Lisa Stickley and Butterfly Home by Matthew Williamson.
Six new stores were opened during the year, comprising three department stores and three Desire stores. The store portfolio at the end of the year comprised 147 department stores, 13 Desire stores and six Magasin stores. In addition, there were 60 international franchise stores in 23 countries.
For Debenhams it’s the second consecutive year of strong PBT growth and net debt position improvement. The process of refinancing Debenhams' debt facilities was completed in July. The new £650 million senior facility comprises a £250 million term loan and a £400 million revolving credit facility expiring in October 2013 with an option to extend to October 2014. A proportion of the debt is being hedged into fixed rate finance.
Debenhams acquired Danish department store chain Magasin du Nord during the first half of the current financial year. Magasin is included in Debenhams' results from 7 November 2009.
Image: Debenhams
