DEPARTMENT store giant Debenhams was one of the biggest high street losers yesterday when it revealed a 12 per cent drop in profits to £94.1 million and warned the retail environment would remain "challenging".
But the retail stalwart added that i
t had gained market share over its competitors in all of its major clothing categories, especially Designers at Debenhams.
Chief executive Rob Templeman said consumer confidence was low, resulting in belt-tightening. Yesterday's figures were ahead of market expectations.
But Templeman said he believed the market could bounce back.
He said: "I think it's more a liquidity factor and some inflation making the consumer feel a bit lower. But the liquidity (situation] in the banking market arose very quickly. I think it could come back very quickly."
He added: "Against the backdrop of a tough retail marketplace, I am pleased with our sales performance for the first half relative to the sector which has resulted in market share gains across our core clothing categories."
Like-for-like sales were down 1 per cent over the 34 weeks to the present, reflecting a downturn in sales.
When the company reported lower first-half sales in March, it had said profit would meet expectations.
The firm added that its store refurbishment programme was progressing well, saying that the 18 core stores upgraded in the first half had recorded a sales uplift and higher gross margins. And the firm added: "Conversion of the nine stores acquired from Roches in September 2006 was completed by December 2007 and all are now trading well as Debenhams."
Debenhams' shares slumped 2.2 per cent yesterday. Analysts Panmure Gordon said: "Clearly, the market is taking the view that Debenhams is broken and, like Humpty Dumpty, can't be put back together again."
The broker added: "The bad news is that we don't think that market conditions are set to get any better very quickly."
Online store debenhams.com saw sales rise by 81 per cent.
A SPORTING CHANCETHE owner of sports chain JD Sports failed to connect with investors despite posting a doubling of annual profits.
John David Group said pre-tax profits rose 103 per cent to £35 million in the 53 weeks to 2 February, helped by an 11 per cent rise in like-for-like sales and an improvement in margins.
But despite the upbeat results for the year to 2 February, the firm, which has two Scottish stores, in Dundee and Glasgow, warned the current situation in the retail sector could dampen growth in the current financial year.
Executive chairman Peter Cowgill said: "Despite recent and current performance, the current economic climate and outlook dictates a note of prudence. The board is therefore cautious about the extent of future growth in earnings."
Analyst David Jeary of Investec Securities said: "John David has successfully carved out a differentiated position within the broader sports market, based among other things on exclusive and own brands, format innovation and targeted marketing and promotion to its core customers."
The company has 345 sports shops branded JD and Size, while there are 87 fashion units trading as Scotts and Bank, which the group acquired for £18.5m at the end of last year.
BURBERRY CHECKS OUT WITH REVENUE HIKEFASHION brand Burberry bucked the trend of other struggling rivals in the sector when it unveiled an 19 per cent rise in revenue over the second half.
The firm, which boasts supermodel Agyness Deyn as its "face" and is known for its checked trademark pattern, said in a trading update that sales growth in its products, particularly in North America, had boosted revenues for the six months to the end of March to £546 million. It also gave an upbeat outlook for the current financial year, saying it expected growth of around 10 per cent in the first half.
Chief executive Angela Ahrendts said: "Burberry had a good finish to the year, against the background of an increasingly challenging external environment.
"Looking forward, we are thrilled with the momentum of our brand as our core luxury, retail and non-apparel strategies continue to gain traction, while our seasoned management team focuses on improving the operational aspects of our business."
Retail sales, which accounted for over 50 per cent of total revenue in the second half, increased by 17 per cent.
NOT SO SWEDE DREAMSA MONTHLY update from Swedish clothing retailer Hennes & Mauritz (H&M) was varied as the firm reported group sales were up 3 per cent, below some market expectations.
Turnover from established stores dropped 8 per cent, signalling that the world's third-largest clothing firm by sales may finally be feeling the effect of the global credit crunch.
Analysts had expected sales to rise by around 7.8 per cent, while stores that had been open a year or more were expected to drop by around 4.1 per cent.
H&M, which has 1,546 stores worldwide, claimed the slowdown was due to poor spring weather and the effect of fewer store opening days over the Easter holidays.
It said: "The late spring in combination with calendar effects have had an impact on sales during the month."
Figures were also skewed by a strong comparison from last year when March sales were boosted by a clothing line designed by pop icon Madonna.
Carl Eckerdal, an analyst at ABN Amro, said: "I don't think that these are catastrophic figures. I had expected a weak development."
BROADBAND DISAPPOINTMENT HITS CARPHONE SHARESCARPHONE Warehouse disappointed the City yesterday as it revealed it had secured fewer-than-expected broadband connections at the start of this year.
The firm signed up just 109,000, below analyst expectations of 128,000, to give it a total of 2.7 million.
Europe's biggest independent mobile phone retailer also lowered its outlook due to increased costs. The firm said in a trading update that net debt had increased, pushing profit expectations lower. Carphone said it now expected full-year, pre-tax profit to be between £215 million to £220m, slightly below the City forecast of £220m to £225m.
Analysts noted concerns about the increased debt.
"In this market, the negative bits will catch the attention," one analyst said.
Chief executive Charles Dunstone said: "Our performance over the last three months has been good in a slower consumer environment."
Of its new sign-ups, Carphone had 1.8 million customers unbundled on its own network, having moved them from BT.
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