Debenhams posted a better-than-expected rise in first-half profit as fewer promotions boosted full-price sales, and an improved online offering helped increase demand.

Pretax profit of £88.9 million for the 26 weeks to February 28th was up 4.3 per cent on a year earlier. It was also above a company-compiled forecast of £84.5 million.

Shares in the company, which has 246 stores in 27 countries, were up 2.3 per cent to 81.45 pence in early trade.

Debenhams has reduced promotions, improved online ordering and delivery options and filled under-used store space with concessions from the likes of Sports Direct and Costa Coffee to increase visitor numbers.

While it had 14 days fewer on promotion overall, supporting higher sales of full-priced own-brand items, like-for-like sales growth of 1.3 per cent was boosted by one such event moving forward one week into the half year period.

Gross margin was flat year on year as the benefit of reduced markdowns was offset by increased sales of lower-margin products such as cosmetics and less discounts during promotions.

Online sales grew 12.7 per cent, boosted by a new next-day click-and-collect option.

Like its rivals, Debenhams had seen sales suffer after mild autumn weather left winter clothing on shelves, however trends improved over Christmas and into the new year.

Debenhams said it was on track to achieve full-year expectations. It added that in-store concessions had proved popular and would be extended to further stores, while more brands would be introduced, including Jack & Jones.

Reuters