Debenhams hopes resilient interim results will restore City confidence

The group's credibility was damaged after its private equity owners returned it to the stock market burdened with 1 billion of debt in 2006, since when its 195p flotation price has slumped to close at 78.95p on Friday.

However, Debenhams revealed in a trading statement last month that despite last year's downturn, the group saw a 0.3 per cent rise in sales in the 26 weeks to 27 February.

The company said that focusing on own-brand products – such as Designers at Debenhams, which includes clothing by Jasper Conran and Betty Jackson – was paying off. Since then it has also launched a collection by hip young designer Henry Holland.

Jean Roche, retail analyst at broker Panmure Gordon, forecast a 9 per cent rise in pre-tax profit to 113.8 million, compared with 104.2m in the same six months last year.

However, in a note published this weekend, Roche said that the broker "continues to prefer clothing retailers with stronger balance sheets, for example Next, or which have more scope for step change, for example Marks & Spencer".

Roche added: "We are concerned that the Debenhams customer may be more vulnerable to macroeconomic weakness if, as the market expects, unemployment rates increase once more."

Analysts will also ask what has happened to net debt at the company, thought to have come down to about 520m, mainly through a 325m stock market cash call last summer.

Keith Bowman, at broker Hargreaves Lansdown, said this week's results should continue the company's gradual rehabilitation with the City.

He added: "Debenhams are not completely out of the woods as far as the debt situation is concerned but they are on the mend."