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Debenhams surpasses expectations revealing 4.3% pre-tax profit increase

Debenhams has revealed a 4.3% pre-tax profit increase to £88.9m, for the last six months, bringing welcome relief to the British retailer who has been well documented as struggling of late.

The company, which has reportedly been the subject of much interest from Mike Ashley, also saw a 1.3% increase in like-for-like sales.

Disclosed in a half-year trading statement this morning Debenhams said good progress has been made against strategic and operational priorities, namely in refocusing promotional strategy, new online delivery options and UK space optimisation trials.

In addition, the company revealed that partnerships with fashionistas Ben de Lisi and Patrick Grant also helped boost retail sales.

Moreover, Debenhams said net debt has reduced by £64.2m to £297.3m due to strong operational cashflows and some timing benefits.

Michael Sharp, Chief Executive of Debenhams, said: “I am pleased with the good progress we have made against the strategic priorities we set out last year.

“We have improved our multi-channel offer and successfully introduced the premium delivery options that we promised for the important peak period, which met with a positive response from our customers.

“The continued refocusing of our promotional strategy delivered a strong increase in full price sales, an improvement in value perception and enabled us to end the half with an improved stock position. Overall we delivered a good first half performance despite a difficult clothing season in Autumn and we are on track to achieve full year expectations.

“Looking forward, our customers tell us they are feeling a little more optimistic about the economic outlook, but they remain cautious.

“Accordingly we are continuing to plan prudently in the near term, while remaining focused on our strategic priorities, and are continuing to invest to ensure that our business is well-positioned to drive sustainable growth in the longer term.”

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