Debenhams jumps on strong Christmas sales Shares in department store group Debenhams surged nearly 9 per cent on Tuesday after a stronger than expected Christmas trading statement showed sales had not been increased at the expense of profit margins. The retailer, which has a reputation for using discounts to entice consumers to spend, reported a 6.5 per cent rise in group like-for-like sales excluding VAT in the month of December, and said gross margin guidance for the full year "remains flat." Michael Sharp, chief executive, said the positive gains were reflected across Debenhams" UK and international stores. "This demonstrates that we were no more promotional than last year, and we weren't deeper with our discounts," he said. Our promotional strategy is a fundamental strength in the difficult trading environment where customers are looking for value for money. Group sales increased by 0.5 per cent when measured across the 18 weeks to January 7, showing that like much of the high street, Christmas came late for Debenhams. "It's impossible to separate where we are from consumer sentiment because of the impact of unseasonably warm weather on buying habits," Mr Sharp added. Sales of cosmetics and beauty products were particularly strong, rising 21 per cent in the week before Christmas compared with the same period a year ago. Mr Sharp described this as a "key driver of footfall" in Debenhams" stores. Online sales grew 35 per cent in the 18-week period, and now represent approximately 10 per cent of the overall sales mix. This year, Debenhams launched its January sale online on Christmas day, reporting a 75 per cent increase in web traffic compared to last year. "People rushed to get the pick of the bargains," said Mr Sharp. It's all about multichannel, not just online. We offer customers lots of different ways to shop, but the biggest way will remain in the department store. "Management expect to see some benefit from lower input prices in the second half, and combined with flat gross margin guidance, this implies that management intends to pass through any benefit of lower sourcing costs to consumers in the form of lower pricing," said Richard Cathcart, retail analyst at Espirito Santo. Whether this has already happened in the form of Christmas discounting, or whether average selling prices later in the year will fall, remains unclear. Debenhams trades from 163 stores in the UK, but Mr Sharp has ambitions to take this figure up to 240 in time, and is in discussions on 30 new sites. The group also intends to double its 65 international franchise stores, many of which are operated with Middle Eastern partner Alshaya, which acquired 60 UK La Senza stores this week via a pre-pack administration. Debenhams shares rose 5.10p to 62p.