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Department stores look to margins

mandsDepartment store chains Debenhams and Marks & Spencer looked to margins in the pre-Christmas period.

170 store chain Debenhams said its enjoyed a strong December with like for like sales including VAT 6.5% higher in the five weeks to December 31.

Like for like sales excluding VAT were flat in the 18 weeks to 7 January and it was able to maintain margin at 2010's level.

'Debenhams has continued to take a pragmatic approach to trading throughout the 18 weeks, focusing on maximising cash gross margin through management of promotional events and product mix. As a result, stock levels are firmly under control across all departments and terminal stock at the end of the first half is expected to be in line with historic levels. At this stage, gross margin guidance for the financial year is unchanged at flat,' it says.

Marks & Spencer says it has found extra cost savings to pay for the promotions in the quarter to 31 December and so maintained margins.

General merchandise sales, which includes home and clothing, dropped by 1.8% in the period with home down 13.3%. The chain says this was 'primarily impacted by our decision to exit technology. Our key focus departments performed well, and the planned rollout of new ranges and store layout later this year will provide a step change in our home offer.'

In contrast food sales rose by 3%.