DEB Debenhams

RNS Number:0783T
Debenhams plc
16 March 2007

                                 Debenhams plc

                            Pre-Close Trading Update





Debenhams plc, the leading department stores group, today releases a pre-close
interim trading update for the first half of the financial year.



Total sales for the 26 weeks ended 3rd March 2007 increased by 5.8% compared to
the 26 weeks ended 4th March 2006. Like-for-like sales for the UK retail
business have declined by 4.5% compared to the equivalent period last year.



Gross margins for the 26 weeks to 3rd March 2007 were 42.5% having fallen 0.4%
versus the corresponding period last year.



The reduction in gross margin was largely attributable to the impact of the
Roches store integration and the shortfall in clothing sales following the
unseasonally warm pre-Christmas trading period. We still expect to see further
progress on gross margin for the full year.



Stocks and costs continue to be tightly controlled and we expect profit before
taxation and exceptional items to be in line with the Board's expectations at
the time of the January trading statement.



The integration of the nine stores acquired in the Republic of Ireland from
Roches stores in September 2006 is progressing well. The conversion of seven of
the stores to the Debenhams trading format is largely complete and we expect the
remaining two stores to be completed during the second half of the financial
year. Initial trading at these stores is in line with our expectations.



In line with our strategy of expanding our department store portfolio, good
progress has been made with our store opening programme. At the start of this
financial year Debenhams had a contracted new store opening pipeline of 25
stores, this has grown to a current pipeline of 29 new department stores. A new
department store was opened in Llandudno in the first half and two new stores
are scheduled to open in Warrington and Wigan (1) in the second half.   In the
next year (FY 2008) seven new department stores and three re-sites are planned
to open.



The number of Desire by Debenhams smaller format stores has also increased, from
four stores trading at the start of the financial year to seven at 3rd March
2007, with new stores opened at Merthyr Tydfil, Birmingham Fort and Kirkcaldy. A
further two Desire stores are planned to open in the second half of this
financial year.



At 3rd March 2007 our store portfolio, including the stores acquired from
Roches, consists of 132 department stores, and seven Desire stores totalling
10.2 million square feet of prime trading space across the UK and Republic of
Ireland. In addition, Debenhams continues to expand its global presence with 32
international stores trading, an increase of eight from 4th March 2006. Two
further stores are scheduled to open by the end of April 2007.



Rob Templeman, Chief Executive, said:



"Although it is far too early to draw conclusions on the performance of our
Spring/Summer ranges, we have been encouraged by the consumer reaction to our
new collections.



We continue to expect the retail environment to remain challenging and to this
end we will focus on managing our stocks, costs and cash margins."






Note:-



(1) Store re-site



Debenhams will be reporting its preliminary results for the 26 weeks ended 3
March at 7am on April 17th, 2007, including a presentation for analysts at
9.30am at the City Presentation Centre, 4 Chiswell Street, London, EC1Y 4UP.





Enquiries:



Media



College Hill

Andy Cornelius                                020 7457 2822

Duncan Murray                                 020 7457 2823



Analysts



Debenhams plc

Rob Templeman, Chief Executive

Chris Woodhouse, Finance Director              0207 408 3302



High resolution images are available for media to view and download free of
charge from www.prshots.com/Debenhams



Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences and
prospects are "forward-looking statements" within the meaning of the United
States federal securities laws.  These forward-looking statements reflect
Debenhams' current expectations concerning future events and actual results may
differ materially from current expectations or historical results. Any such
forward-looking statements are subject to various risks and uncertainties,
including: Debenhams' ability to accurately predict customer preferences and
demands; the effectiveness of Debenhams' brand awareness and marketing
programmes; the occurrence of weak sales during peak selling seasons or extreme
or unseasonal weather conditions; competitive factors in the highly competitive
retail industry; Debenhams' ability to successfully implement its new store
rollout and department store refurbishment/modernization strategy; Debenhams'
ability to maintain its relationships with certain designers and its significant
concession partners; currency fluctuations and currency risk.

*           *           *

Additional risk factors that you may want to consider are: Debenhams' ability to
retain key management and personnel; disruptions or other adverse events
affecting Debenhams' relationship with its major suppliers or its store card
provider; factors outside Debenhams' control, such as changes in the financial
or equity markets, adverse economic conditions or a downturn in the retail
industry, or damage or interruptions due to operational disruption, natural
disaster, war or terrorist activity; and work stoppages; slowdowns or strikes.





                      This information is provided by RNS
            The company news service from the London Stock Exchange
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