Profit margins at British department store group Debenhams dipped slightly in the six months to March 3rd following its acquisition of the Roches Stores chain.
Debenhams attributed the 0.4 per cent drop in gross margins to 42.5 per cent in the first half of its financial year to the integration of the nine Roches Stores outlets acquired in September.
Margins were also hit by warm weather in the lead-up to Christmas, which resulted in a shortfall in clothing sales.
In its trading update yesterday, Debenhams said the integration of the Irish stores was progressing well, with initial sales in line with expectations.
"The conversion of seven of the stores to the Debenhams trading format is largely complete, and we expect the remaining two stores to be completed during the second half of the financial year."
The company also expects gross margins to "progress well" during the remainder of the year.
Total sales grew 5.8 per cent compared to the same six months a year earlier.
However, when the contribution from the new stores is excluded, like-for-like sales generated by the company's UK retail business fell by 4.5 per cent.
