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Debenhams sales for H1 in FY2013 hit by snow, weather factors

RBR Staff Writer Published 05 March 2013

British department store chain Debenhams has reported a 10% decline in sales for the 13-day period between 14 January and 27 January due to snow and adverse weather conditions across the UK.

The decline resulted in a retarded 3% increase in like-for-like sales across its portfolio for the first half of fiscal 2013.

Debenhams CEO Michael Sharp noted that the disruption from the snow had affected all retailers, as revealed by the data from accountants BDO, which showed that like-for-like sales across the sector dropped by an average of 9% during the two-week period.

The promotional events that the company has rolled out to boost the sales have failed in fully recovering the losses suffered in January 2013, the company stated.

Nevertheless, Debenhams has stated that the gross margin for 2013 is more likely to remain flat, contrary to its previous estimations of 10 basis points increase.

It also expects the profits of nearly £120m for the 36-week period of the year attributable to the disruption caused by bad weather.

"Whilst the impact of the snow on the outcome for the first half is disappointing, it is now behind us and sales volumes have recovered.

"Our strategy to build a leading international, multi-channel brand remains on track and we continue to focus on the four pillars of the strategy and investing in our business for long-term, sustainable growth," concluded Sharp.

The chain is set to launch spring-summer ranges to kick start its sales for the remainder of the financial year.