15th Sep 2009 07:00
15 September 2009
DEBENHAMS PLC - YEAR END TRADING UPDATE
Debenhams plc, the leading department stores group, today releases a trading update for its financial year 2009 which ended on 29 August 2009.
Gross transaction value for the year to 29 August 2009 was 0.2% higher than the previous year. As a result of the increase in sales, together with a strong gross margin performance and tight management of stocks and costs, profit before tax and EBITDA for the financial year are expected to be ahead of last year and in line with management's expectations.
During the last quarter of the year, the largest space moves in Debenhams' history commenced which will result in c530,000 sq ft of trading space being converted from concessions to own bought ranges, including the introduction of a number of new brands and departments. As expected, this programme caused disruption to sales in the latter part of the second half. Like-for-like sales for the second half were 3.8% lower than last year compared to a decline for the year of 3.6%. The shortfall in like-for-like sales has been more than offset by a strong gross margin performance which improved significantly as the year progressed. Customers' initial reactions to the space moves have been positive and they are scheduled to be completed on time by the end of September.
Market share gains were achieved throughout the year (source: TNS Worldpanel Fashion 24 weeks market share data to 19 July 2009 vs. 2008). The exclusive Designers at Debenhams and own bought ranges were the best performing categories and were key drivers of a year-on-year gross margin gain of 70 basis points for the full year.
Following the successful capital raising in June, a £50 million pre-payment was made against next year's scheduled amortisation payment on the term loan. Further progress has also been achieved in repurchasing debt in the market at a discount. At year end, £61.4 million had been repurchased at an average discount of 5.6%.
Five new department stores were opened in the UK during 2009, creating 800 new jobs. At year end the portfolio stood at 144 department stores and ten Desire stores in the UK and Republic of Ireland plus 52 international franchise stores.
Debenhams preliminary results for the financial year 2009 will be released on Thursday 22 October 2009.
Rob Templeman, Chief Executive of Debenhams, said:
"Our sales, margin and profit performance during 2009 is pleasing. We believe that the increase in profits in a year which has seen some of the most difficult and volatile trading conditions in recent times is a creditable performance.
"Looking to the new financial year, it will be difficult to predict consumer behaviour. Although it is early days, we are encouraged by the launch of our new brands which we expect to benefit gross margin during the course of the year. We will continue to focus on the drivers of cash profit during the year."
- Ends -
A conference call for analysts and investors will be held today at 8:00am on +44 (0) 20 8609 0582. A recording of this call will be available for seven days on +44 (0) 20 8609 0289 or +1 866 676 5865 (USA), PIN 271148#.
Enquiries
Analysts/Shareholders
Debenhams plc
Rob Templeman, Chief Executive
Chris Woodhouse, Finance Director 020 7408 3302
Lisa Williams, Investor Relations 020 7408 3304
Media
Financial Dynamics
Jonathon Brill 020 7269 7170
Billy Clegg 020 7269 7157
Caroline Stewart 020 7269 7227
Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences and prospects are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect Debenhams' current expectations concerning future events and actual results may differ materially from current expectations or historical results. Any such forward-looking statements are subject to various risks and uncertainties, including: Debenhams' ability to predict customer preferences and demands accurately; the effectiveness of Debenhams' brand awareness and marketing programmes; the occurrence of weak sales during peak selling seasons or extreme or unseasonal weather conditions; difficult market conditions and fragile consumer confidence; competitive factors in the highly competitive retail industry; Debenhams' ability to successfully implement its new store rollout and department store refurbishment/modernisation strategy; Debenhams' ability to maintain its relationships with certain designers and its significant concession partners; and currency fluctuations and currency risk.
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Additional risk factors that you may want to consider are: Debenhams' ability to retain key management and personnel; disruptions or other adverse events affecting Debenhams' relationship with its major suppliers or its store card provider; factors outside Debenhams' control, such as changes in the financial or equity markets, adverse economic conditions or a downturn in the retail industry, or damage or interruptions due to operational disruption, natural disaster, war or terrorist activity; and work stoppages; slowdowns or strikes.
Notes to Editors
Debenhams is a leading department stores group with a strong presence in key product categories including Womenswear, Menswear, Childrenswear, Home and Health and Beauty. Debenhams is the second largest department store chain in the UK.
Debenhams has a total of 144 department stores in the UK and the Republic of Ireland and 10 Desire by Debenhams stores, which is a small store concept featuring a mix of womenswear, accessories, lingerie, cosmetics and childrenswear. Debenhams has 52 international franchise stores in 17 countries and an online store, www.debenhams.com, through which much of the Debenhams range is available.
Designers at Debenhams include Ted Baker, Jeff Banks, Jasper Conran, Erickson Beamon, Pip Hackett, Betty Jackson, Ben de Lisi, Julien Macdonald, Melissa Odabash, Jane Packer, Pearce Fionda, Janet Reger, John Rocha and Matthew Williamson.
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