Debenhams to post sales rise amid tough times

The department store chain Debenhams will this week warn that the fashion sector has endured tough early summer trading, although it is still expected to have grown sales.

Clothing retailers have had a spring and summer to forget so far after precious little warm weather, with three out of four running price promotions two weeks ago – the highest-ever reading for this time of year, according to the accountancy firm PwC. Debenhams is set to post like-for-like sales up by 2.9 per cent over the 16 weeks to 22 June, analysts at Cantor Fitzgerald said.

While this will be ahead of the most recent sales performance of its big rival Marks & Spencer, the City will scrutinise comments by the chief executive Michael Sharp on margins.

Debenhams blamed the snow in January for a profit warning but will this week reaffirm it will meet City expectations for reduced profits and boast that it has grown market share across men's, women's and children's clothing.

Cantor Fitzgerald forecasts that Debenhams will post lower profits of £152.3m over the year to August.

PwC said that 75 per cent of retailers were on promotion, such as three items for the price of two, a fortnight ago, which was up 2 per cent on last year and compares with just 40 per cent in 2009.