(Adds CEO comment, analyst comment, share price)
By Sarah Young
LONDON Jan 12 Debenhams, Britain's No.2
department store chain, grew sales over its Christmas trading
period, as customers bought more make-up, fragrances and
lingerie, showing a strategy to shift away from fashion sales
British shoppers have defied predictions that Christmas
spending would be down, and continued to treat themselves.
Debenhams' peers Marks & Spencer and John Lewis
also reported growth, in contrast to clothing retailer Next
which has suffered as Britons cut back on clothes
Debenhams, which is second to No.1 department store chain
John Lewis, reported underlying sales growth of 3.5 percent in
the 18 weeks to Jan.7, beating a consensus forecast for growth
of 1.2 percent.
Over the seven-week period which included Christmas,
underlying reported sales were up 5 percent.
"I'm delighted that the business has delivered a good
trading performance over peak," Chief Executive Sergio Bucher
told reporters on Thursday.
Bucher, a former Amazon executive who took the helm
at Debenhams in October, confirmed he would outline his plans
for the company in April, but said he was encouraged by the
company's focus on growing beauty and gifts rather than clothes.
Shares in Debenhams were up 4.9 percent at 56.9 pence at
1009 GMT. Over the last 12 months, Debenhams shares have slumped
26 percent, underperforming both the FTSE midcap index
of which it is part, which is up 10 percent, and bigger rival
Marks and Spencer which has lost 17 percent in the same period.
Analysts at Investec suggested the stock had further to run
as Christmas trading should reassure that Debenhams was on track
to meet full-year forecasts.
"We also expect more positive sentiment towards the shares
in anticipation of the new CEO's strategy reveal in April,"
Investec analyst Kate Calvert said.
Debenhams said online sales grew 13.9 percent in the 18-week
period, meaning that sales via the web now account for about 17
percent of the overall mix.
John Lewis said on Thursday it would invest heavily in its
online business this year after 40 percent of total sales came
from the internet over Christmas, raising questions about
whether Debenhams may need to follow suit.
"We believe a major increase in capex could put the
dividend, a key part of the investment case, at risk," said
(Reporting by Sarah Young; editing by Costas Pitas and Susan