New-look Debenhams sales surge

AS THE City braces itself for more gloomy trading news from Marks & Spencer tomorrow, rival department stores group Debenhams today reported higher profits and said it was enjoying 'very strong' current trading.

The group, taken private in a £1.7bn deal last December, has repaid £537m of its debt and handed back £130m to shareholders.

Trading profits rose 14% to £184.7m in the 52 weeks to 28 August, on sales 5.1% better at £1.9bn.

Like-for-like turnover was 1.6% ahead although the rise in the second half, after it was bought out by a private equity consortium led by Texas Pacific, CVC Capital and Merrill Lynch Private Equity, was 2.5%.

At the pre-tax level, property profits boosted the figure from £137.2m to more than £300m.

At M&S, chief executive Stuart Rose has already warned half-year profits will fall from £311m to between £285m and £295m.

But, amid rumours of double-digit declines in like-forlike sales, the City will be more interested in what he has to say about current trading.

At Debenhams, the store opening programme is to be accelerated, with 20 new outlets planned in the next four years. It will open the first 'mini-Debenhams' a cutdown version of the department stores, next spring.

There are no plans yet to sell or re-float the business, said finance director Chris Woodhouse. 'There's still loads more work to be done.'