Departing chief executive says that, despite flat sales, retailer does not see 'everything falling off a cliff'
Rob Templeman is to leave Debenhams after eight years as chief executive, as the department store chain revealed a better performance than many on the high street, reporting flat like-for-like sales for the first half of its financial year.
Templeman, 53, said he had "no plans whatever" for his career after Debenhams, where he will remain for a further 18 months, as chief executive until 5 September then as a consultant. He will be replaced by Michael Sharp, deputy chief executive since November 2008, who joined the group in 1985 when it was bought by his then employer, Burton Group.
Although Debenhams has performed relatively well, like-for-like sales were flat in the six months to 26 February, and, when the impact of January's 0.25 percentage point VAT increase is factored in, underlying revenues fell by 1.5%. Analysts said Debenhams had been cushioned from the full impact of the weakening economy because, although not cheap, it represented "value for money".
Templeman said: "We don't see the economy improving, but we don't recognise the sales declines everyone is talking about. We don't share the view that everything is falling off a cliff."
He added that like-for-like sales in the second half of its financial year – since 26 February – were better than in the first half and said he took comfort in the fact that cotton prices showed signs of declining.
However, lower cotton costs would only start to affect the price of garments in about a year's time, he said. Rising cotton prices pushed up the price of garments by 8% in the period, of which half was passed on to consumers in the form of higher prices. Shares in Debenhams rose by 0.52p to 67.32.
WH Smith's figures were less impressive, with the group reporting a 5% slump in recent like-for-like sales. Kate Swann, chief executive, said: "It's really tough. Consumers don't have any money in their pockets, VAT has gone up, fuel has gone up and people are worried about their jobs."