Debenhams numbers shed some cheer on retail gloom

Debenhams offered hope today that talk of apocalypse on the High Street is overblown as it posted decent sales figures that suggest shoppers have not been made entirely extinct.

Several chains have fallen into administration and others are tipped to follow amid what senior retailers say are the toughest trading conditions they have ever seen. In a trading statement covering the 43 weeks to June 25, the department store saw sales up 3.1%. Like-for-like sales which strip out new store space were up 1.1%

Anecdotally, retailers say June has been dreadful, as public-sector cuts and fears of unemployment leave consumers cutting down spending.

Debenhams at least seems to be riding out the storm.

It said it is "particularly pleased with the sales trends that we have experienced over the past two months". Tom Gadsby at Matrix Group said in a note to clients that the figures are "encouraging, as the rest of the sector has seen a slowdown since April's good weather and bank-holiday spree.

"We have spoken to the company this morning and understand that underlying demand remains robust and that the decent third-quarter sales numbers are not simply as a result of price investment.

Consumers are still buying quality fashion: the Principles and Henry Holland ranges have sold well, and they are certainly not at the bottom of the pricing architecture. We would see this as a good read across for M&S."

The stock slipped 1.1p to 67.3p.

The firm trades from about 170 stores in Britain, Ireland and Denmark and about 60 franchised outlets in 24 countries.