Department store chain Debenhams today surprised the market by reporting a slight increase in profits and an expansion plan that will see the British company open new stores during the recession. Rob Templeman, CEO of Debenhams said the better than expected results were the result of his management team focussing on keeping costs down.
In its first half trading statement, Debenhams announced that pre-tax profits were higher than the same period last year, but did not actually provide a figure. It did report that its gross transaction value for the 26 week period was 0.3 per cent higher, although like for like sales were 3.6 per cent lower. This was due to a focus on higher value transactions and a reduced focus on large sales like its Blue Cross sale.
Debenhams said their effort to manage costs is helping deliver the increase in profits through "tight management of costs and stock". The department store chain has also been successful in acquiring the stock and brand of the Principals chain and keeping the franchise within its stores.
Despite the recession hitting the retail sector hard, the company said it was planning to open new stores across the country in the Newcastle, Wales, Somerset, Oxfordshire, Lancashire and Yorkshire, creating 1,200 jobs.
Debenhams has been investing in its IT to improve efficiencies and recently signed a deal with CA to implement project management software in an effort to reduce costs and ensure only profitable and useful projects continue.