Department store chain Debenhams, defying gloom on high street with better than predicted first-half performance, is going to create 1,200 new jobs over next 2 years.  The retailer would open additional 8 stores in the UK, including outlets in Newcastle-upon-Tyne, Wakefield and Kidderminster, before end of 2011.

Debenhams claimed that it was not an acceleration of store opening programme, but reaffirmation of management’s confidence in its business strategy when many retail rivals were cutting back on their expansion plans.

Debenhams’ like-for-like sales for 26 weeks to February 28 fell by 3.6%. This was more than expectations and included single day loss of £200,000 at its Oxford Street store due to bad weather in early February. Sales growth was attributed to its own bought ranges namely Designers at premium lines.
According to its chief executive, Michael Sharp, Debenhams had increased market share in men’s and childrenswear.

Debenhams’ 26 weeks’ gross transaction value was up 0.3% than previous year. This, coupled with higher gross margins, would result in first-half pre-tax profit exceeding £92 million it registered in same period last year.

However, Debenhams did not clarify on plans to raise capital for expansion, although it already has net debt of over £900 million. Lack of clarity on the issue unnerved investors and resulted in plunge of 5p or 10.87%, reversing 15% gain made on Monday.

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