Conversion of 53,000sq ft of sales space from concession to own-bought ranges pays off, as department store reports increase in sales and gross margin in 2009.
Total sales were up 0.2% at Debenhams for the year ended August 29, 2009, with like-for-like sales down 3.6%. The department store chain's pre-tax profit also grew 14.1% to £120.8m, while its gross margin jumped 70 basis points, driven by more commitment to and higher sales in own-bought ranges.

In Q4, Debenhams carried out the largest space move in its history, converting 530,000 sq ft of trading space from concession to own bought ranges. 200,000 sq ft of the converted space was attributed to home concessions.

During the 12-month period, own-range products accounted for 76% of Debenhams' sales, compared with 71.8% last year. Designers at Debenhams, which includes home ranges by Ben de Lisi, Matthew Williamson, John Rocha and Jasper Conran, also made a strong contribution to sales during 2009 - around £432m - an increase of 11.4% on the previous year. Unsurprisingly, the weakest category was concessions, which saw sales drop 16.5% over the year.

Current trading for the seven weeks to October 17 reported a 2.8% sales increase, with like-for-like sales up 0.6%.

Debenhams chief executive Rob Templeman said: "We are very pleased with the outcome for 2009, especially given the difficult economic and retail environment. Achieving profit growth in these circumstances is, we believe, a creditable performance.

"The store space moves have now been completed and early indications are that customers are finding favour with the new ranges and departments. We look forward to further developments in our own bought ranges in 2010 and will continue to focus on improving the design, quality and value of our entire customer offer."

The company's online offer, Debenhams Direct, saw a sales increase of 31% to £55.1m, with visitors to the site up 36.8% in 2009.

In June this year, Debenhams raised £303.8m in a placing and an open offer capital raising. Funds raised through this went towards to reducing the company's net debt by £403.7m to £590.3m.

Debenhams has secured the opening of six new stores in the next financial year, including two Desire branches in Kidderminster and Monks Cross in York. The refurbishment of its core stores was largely put on hold in 2009, but the company plans to restart the programme in the second half of 2010.

Mr Templeman added: "The outlook for consumer behaviour remains hard to predict. However, we are encouraged by the response of customers to the changes we have made to our offer. Our focus will continue to be on the drivers of cash profit. We will also be investing for future growth through the opening of new stores, development of our multi-channel business and recommencing the store refurbishment programme."

It was also announced that Debnehams chairman John Lovering will retire on March 31, 2010m while Nigel Northridege is to join the board as non-executive director on January 1, 2010.