Debenhams, Britain's second-biggest department stores group, posted full-year profit towards the top end of expectations and said underlying sales had turned positive at the start of its new financial year.
The firm, with over 150 stores in Britain and Ireland and more than 50 franchised outlets overseas, said it cut debt by over £400 million to £590.3 million in the year ended August 29th and had repaid £100 million more since then.
It also said today that chairman John Lovering would step down in March.
Profit before tax, goodwill and one-off items was £125.2 million.
Sales at stores open at least a year fell 3.6 per cent, but were up 0.6 per cent in the seven weeks to October 17th.
"The outlook for consumer behaviour remains hard to predict," chief executive Rob Templeman said.
"However, we are encouraged by the response of customers to the changes we have made to our offer, he added, referring to the firm's switch to more own-bought clothes, such as its Designers at Debenhams ranges, rather than concessions.
Debenhams shares have almost quadrupled in value this year, helped by a £323-million equity fundraising in June which put an end to worries about its debts.
The firm had been dogged by concerns about its borrowing since returning to the stock market at 195 pence a share in 2006 after two-and-a-half lucrative years in private equity hands.
Britain's retailers are also starting to benefit from signs of recovery from recession. An industry survey last week showed retail sales growing at their fastest annual pace in September for five months.
Debenhams shares closed at 83.1 pence yesterday, valuing the business at about £1.1 billion.
Reuters