British department stores group Debenhams said same-store sales had risen this spring, reassuring investors that tough trading conditions will not damage its ability to pay down debt, and lifting its shares. The company bought Roches Stores' outlets in Ireland in 2006.
Debenhams shares rose 16% in early trading. Its stock had fallen around a third in value in the past month on fears it might struggle to pay off its £1 billion sterling of debt.
'In light of the tough trading environment across the whole UK retail sector, we are pleased with customer response to our new ranges and, as a result, our improving sales performance for the period,' CEO Rob Templeman said.
Templeman said Debenhams was taking market share from rivals and that net debt at the end of its financial year would be in line with analysts' expectations. He forecast further market share gains over the summer.
Debenhams said like-for-like sales rose 1% in the 10 weeks to June 21, a turnaround from the previous 32 weeks when like-for-like sales fell 1%.
Templeman said that the company had brought forward its trading update because of inaccurate market rumours, one of which had suggested the group's like-for-like sales were down 9%.
Templeman said May had been a good month, particularly the first two weeks, 'when the sun came out' and released pent-up demand for summer fashions.
His comments back up official data which showed retail sales saw their biggest month-on-month rise in May since the series started in 1986.
