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Good results in H1; cotton prices may fall back - Debenhams

15 Apr '11
4 min read

Debenhams announced that it has bucked the downward trend seen by other High Street retailers by boosting half year interim profits by 4.5 per cent to £129.2 million.

The increase in profits means that the retailer has produced six consecutive halves of pre-tax profit growth.

Debenhams will also be reintroducing a dividend for shareholders and has reduced its debt by £165.2 million.

New exciting young designers such as Jonathan Saunders, Preen and Jonathan Kelsey have spurred demand, bolstering the retailer's reputation for selling leading fashion at affordable prices.

The existing Designers at Debenhams portfolio has been extended with Julien Macdonald adding 'Diamond' to his offer – the little sister to his successful Star range. J Jeans by Jasper Conran was also extended into menswear.

One of the biggest sellers was cosmetics and perfumes, with an increase in market share from 26.8 to 28.1 per cent contributing to the sweet smell of success.

Online sales have jumped by 82.4 per cent, boosted by a new mobile iPhone app which lets customers buy Debenhams products from where ever they are.

Its brand advertising campaign, featuring well known designers including Jasper Conran, Aliza Reger, Ben de Lisi and Julien Macdonald, is also paying off with sales of products featured soaring. In some cases lines were up 300%.

The retailer also saw market gains in women's casualwear and childrenswear.

And Debenhams believes the price of cotton may fall soon, bringing lower prices and better value to customers.
Other highlights include:

• Lipsticks, mascara and nail varnish combined sales break the one million volume barrier in the first six months of the year for the first time
• Lipstick +19%, mascara sales +21% nail varnish +21%
• Sales of bottled fragrance +7.8% and gift sets +11.7%. Sold nearly 4m perfumes in the period
• Sales double of Ben de Lisi Mondrian dress due to tv ad
• Reger by Janet Reger bra and panty set up 300% due to tv ad
• Nearly one million handbags sold during first six months. Jasper Conran J Jeans shoulder bag being the most popular
• Nearly 40,000 party dresses sold in the week prior to Christmas
• Top sellers online include Egyptian cotton towels, Christian Lacroix perfume, Thornton's chocolates, Silverlit remote control Helicopter.
• 15,000 Red Herring aviator jackets 'fly out of the stores'
• In recent weeks Royal Wedding memorabilia fever hits stores with 14,000 units of Kate and Wills china being snapped up
• Market share gain in childrenswear gathering momentum due to popular items such as bluezoobaby elephant sleepsuit, bluezoo heart top and the bluezoo chimp short sleeve tee and Baker by Ted ranges.
• £4m chairs sold from within the home division
• Customers opt for mugs for their morning cuppa with 350,000 sold

“We are pleased with the performance of the business in the first half. The trading environment has been difficult but our focus on profit and cash generation has continued to deliver returns. Debenhams has now produced six consecutive halves of pre-tax profit growth in what has been a consistently challenging retail climate”, said Rob Templeman, chief executive, Debenhams.

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