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Roches deal hits Debenhams margins

Roches Stores - 'Lower margin' sales
Roches Stores - 'Lower margin' sales

Department store group Debenhams says total sales were up 6.3% in the 19 weeks to January 13 compared with the same period last year.

But underlying sales in its UK retail business were down 4%. Debenhams said its figures had been hit by slower than expected clothing sales and the acquisition of Roches Stores. Debenhams referred to Roches' reliance on lower margin concession sales, though it said the integration of the stores was ahead of schedule.

'Debenhams' sales performance has improved since we reported figures for the period to 10 December 2006 but the market remains challenging and we are cautious about the out-turn for the rest of this financial year,' said chief executive Rob Templeman.