Interim Management Statement

    RNS Number : 1435L
  Debenhams plc
  06 January 2009
   



    6 January 2009

    DEBENHAMS plc
    INTERIM MANAGEMENT STATEMENT

    *     Sales increase 
    *     Profit ahead of last year
    *     Net debt down
    *     Market share gains in all major categories

    Debenhams plc, the leading department stores group, today releases its interim management statement for the year-to-date. This covers
the 18 weeks ended 3 January 2009.

    For the 12 weeks since Debenhams last reported on 21 October 2008, gross transaction value was 1.1% higher than last year. Like-for-like
sales for this period decreased by 3.3%.  This represented an improvement over the like-for-like decline of 4.2% recorded for the first six
weeks of the financial year.

    For the 18 weeks ended 3 January 2009, gross transaction value was 0.6% above the comparative period last year. Like-for-like sales for
the 18 weeks were 3.5% lower than last year reflecting the extremely difficult and volatile trading environment seen across the retail
sector.  Following on from the strong market share gains in the last financial year, Debenhams has continued to take market share from
competitors in all major categories.  

    Gross margin year-to-date was flat on last year.  

    Profit before tax and EBITDA for the 18 week period were both up on last year due to the increase in gross transaction value, the
continuing tight management of costs and stocks and our decision to focus on the levers that drive cash margin.

The business remains strongly cash generative despite our capital investment in the opening of new stores. Net debt remains in line with
management targets and as at 3 January 2009 was significantly lower than at the corresponding date last year.

    Stocks have been tightly controlled during the period with total stock levels closing 7.3% below last year, representing a stock density
reduction of 13.4%. Terminal stocks are forecast to be at near historical low for the half year.

    We have been pleased with the performance of own bought products which have continued to grow at a faster rate than concessions. In
particular our exclusive Designers at Debenhams brands have made a strong contribution to market share gains and to the overall performance
of the business.  These brands provide an important competitive advantage as consumers are looking for the latest styles and fashions but
are also seeking the assurance of quality, durability and superb value that Designers at Debenhams represent.

    Debenhams trading results reflect our decision in early 2008 to reduce the number of SKU options and absolute stock levels within the
business whilst investing in greater availability of bestsellers.  Our emphasis on delivering value - not just through meaningful price
reductions but more through adding extra quality and design features into our products - has been, in our view, a critical factor in our
relative out-performance.

    Since the start of the year four new department stores have been opened, increasing trading space by some 2.3% giving us 10,953,000
square feet of prime trading space.  The total number of stores within the UK and Ireland now stands at 153 compared to 146 at this time
last year.   

    Debenhams Direct, the online business, continued to grow strongly with year-to-date visitor numbers and sales up 39.2% and 37.4%
respectively. The international franchise business also performed well and seven new stores in five countries opened during the period.


    Rob Templeman, Chief Executive of Debenhams, said:

    "Our trading strategy for the first 18 weeks of the year has resulted in further market share gains and a creditable sales performance
given the extremely difficult and volatile conditions seen across the high street. Our increase in profits is pleasing and reflects our
stated intention to invest gross margin gains in strategic promotions as needed but overall to run the business focussing on cash profit
rather than just sales.

    "More than ever consumers are looking for high quality products at good value prices.  Debenhams has supplied this during the important
Christmas trading period through ongoing improvements to our designs and products made over the past 18 months alongside tactical
promotional activity.

     "Looking forward, the trading environment is likely to remain challenging for the whole retail sector. We will continue to focus on
bringing fashionable and stylish products to the consumer as well as managing the business with an emphasis on the tight control of costs,
stocks and capital."

    John Lovering, Chairman of Debenhams, said:

     "Only the best positioned and managed businesses will emerge from the recession in a position to capitalise on the shake out currently
taking place within our industry.  Debenhams has a great consumer franchise, a first class store portfolio and a unique depth of
experienced, commercial management.  We will continue to take all the necessary steps to ensure that Debenhams emerges from the challenging
and competitive conditions in 2009 as one of the retail winners.

    "The Board and I would like to thank all of our colleagues throughout the business for an outstanding effort particularly over the
critical Christmas period; their hard work and commitment have really made the difference in these testing times."


    A conference call will be held today at 10:30am on 020 3003 2666 (UK) or +44 (0) 20 3003 2666 (overseas), conference call title
"Debenhams plc IMS". A replay of the call will be available for seven days on 020 8196 1998 (UK) or +44 (0) 20 8196 1998 (overseas), PIN
4452389�.


      Enquiries

    Analysts/Shareholders
    Debenhams plc
    Rob Templeman, Chief Executive                     
    Chris Woodhouse, Finance Director                    020 7408 3302 
    Lisa Williams, Investor Relations                          020 7408 3304

    Media
    Financial Dynamics
    Jonathon Brill                                                         020 7269 7170
    Billy Clegg                                                              020 7269 7157


    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; difficult market
conditions and fragile consumer confidence; 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
partner; and 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.

    Notes to Editors

    Debenhams is a leading department stores group with a strong presence in key product categories, such as womenswear, menswear, homeware
and health and beauty. 

    Debenhams has a total of 153 stores in the UK and Republic Ireland, comprising 143 department stores and 10 Desire by Debenhams stores,
the small store concept which features a mix of womenswear, accessories, lingerie, cosmetics and childrenswear. Debenhams has a further 48
international franchise stores in 17 countries and an online store, www.debenhams.com, through which much of the Debenhams' range is
available.

    Debenhams is the second largest department store chain in the UK.

    Designers at Debenhams include Ted Baker, Jasper Conran, Erickson Beamon, Frost French, Pip Hackett, Betty Jackson, Ben de Lisi, Julien
Macdonald, Melissa Odabash, Jane Packer, Pearce Fionda, Janet Reger, John Rocha, Eric von Peterson and Matthew Williamson.

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