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Debenhams on the up, but dividend is sunk by debt
Evening Standard23 Apr 2009
IF Sir Stuart Rose's Marks & Spencers, Sir Philip Green's TopShop and Simon Wolfson's Next want to know where their customers have gone they should ask Debenhams and its chief executive Rob Templeman.
If consumers of fashion are going anywhere on the High Street at the moment it appears to be Debenhams, and especially its new flagship store in Westfield, to be wowed by the designs of Julien MacDonald, Betty Jackson and John Rocha.
The department store group said profits in the six months to the end of February were up 10% at £104 million and sales since then have risen 6.1%, with like for likes through the spring showing growth of 1.9%.
“The consumer is either looking for incredibly good value or excellent style and quality and our designers ranges are up 11%,” said Templeman.
“These ranges are exclusive but affordable and there is some evidence that we are benefiting from people trading down from luxury brands.
“Sales are up, margins are up, costs are under control. We believe this is a very credible result.”
Despite the upbeat message the bad news is that Debenhams, groaning under the strain of £925 million of debt, has joined the long line of retailers to scrap its dividend.
Last year's interim was worth 2.5p and Templeman gave no sign there would be a final pay out which last year was cut to just 0.5p, giving a full-year dividend more than 50% lower than the previous year.
