One day, a British company will issue a results statement that reads: “Thanks to the weather, the business fared better than we expected . . .” For companies seem to have no qualms about blaming the weather, but never praise it.

Yesterday, Debenhams came close. The one bright spot in its account of a lacklustre year was the last seven weeks of trading, which showed like-for-like trading up 2.1 per cent. Rob Templeman, the chief executive, had the grace to acknowledge that, at least in part, this was thanks to a bout of cold, clear ideal shopping weather last month.

The glimpse of good news from Debenhams offered the chance to ask what just a few months ago seemed unthinkable: is the department store turning around?

Debenhams has been picked on for much of the past year, partly because investors are sore that it has lost nearly half its value since it floated in May last year, partly because it has been a favourite of short-sellers and partly because shoppers have been underwhelmed by its clothing.

But the signs are that Debenhams is coming back to life. It has proved a resiliently cash-generative business, which has halved its debt to about £1 billion in little over a year and nearly tripled its dividend. It appeared yesterday that plenty of short-sellers had closed their positions.

The refurbishment of the stores seems to be paying off: the half-dozen places that have been refitted have seen a nearly 10 per cent improvement in sales. The Debenhams range has shed its love of grey and rediscovered a bit of colour, thanks to the inclusion of more fashionable names such as Ted Baker.

If there is a leading indicator, it is the company’s key shareholders, who have all stuck devoutly by the stock. The original private equity investors – CVC, TPG and Merrill Lynch - have shown no sign of abandoning their combined 30 per cent stake. The management has kept its 7 per cent. And Baugur, the Icelandic group, retains a significant interest via contracts for difference.

The very concept of the department store may seem like a retailing throwback, which will go the way of haberdashery departments and shop assistants wearing gloves. but the evidence from Selfridges to John Lewis is that the upmarket souks of the British high street have a long and prosperous future ahead of them.

Within the retailing industry, Debenhams is considered to be oversold. There has been plenty of talk that Mr Templeman and his team have done irreparable damage to the store’s reputation. But much the same was said a few years’ ago about the M&S brand. And there are potential buyers of the business lurking: Baugur, of Iceland, has ruled out making a bid, but only for the time being; KarstadtQuelle, of Germany, keeps an admiring eye on the company.

The worry for Debenhams is that the internal improvements to performance, the expansion and upgrade of its stores and the revamping of the clothing range for women and, more particularly, for men, will coincide with a downturn in consumer spending. Debenhams looks set for a much improved 2008. If it disappoints, it can blame the (economic) climate.

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