Debenhams has revealed that sales have begun to pick up across the business as the chief executive insisted that Britain’s second-largest department store group could cope with the high-street downturn.

Rob Templeman said that underlying sales had climbed 2.1 per cent in the past seven weeks after falling by 5 per cent in the 12 months to September 1.

He added that Debenhams’ new autumn-winter ranges were being “well received”, while the group was also benefiting from its previous investment in improving its IT and supply chain.

“Despite wider concerns about the macro-economic environment and how this will impact on the retail sector, we are confident that the changes we are making throughout Debenhams are benefiting the business,” Mr Templeman said.

Debenhams is taking market share in women’s and children’s clothing and he said that the store had improved its menswear ranges, the source of problems earlier in the year. Online sales increased 68 per cent in the last quarter of the financial year after a £7 million investment, while recent refurbishments have lifted sales by an average 7 or 8 per cent in the improved stores.

However, Mr Templeman and the rest of the Debenhams board are highly unlikely to receive a bonus this year. The company announced an 18.5 per cent slide in operating profits after a disappointing 5.1 per cent rise in sales and 0.9 per cent fall in gross margins for the group over the past year.

Shares in the group, which have almost halved since it rejoined the stock market in 2005, rose ¼p to 103¾p as investors remained cautious about the outlook for Debenhams.

A stream of retailers from Next to John Lewis have said recently that higher interest rates had yet to bite on consumers and could hit spending in the run-up to Christmas. Mr Templeman said that this Christmas would be “all about taking market share”.

Debenhams raised its full-year dividend to 6.3p per share, up from the 2.4p-a-share payout announced a year ago for a four-month period.

Selling points

— Debenhams has put itself back on track for autumn by increasing the appeal of men’s fashions. It has tapped into trends with items such as brightly coloured sweaters and luxurious knitwear

— Boys’ clothing sales have been given a lift by a tie-up with Ted Baker, which has produced a special Baker by Ted Baker line for the chain

— Bestsellers include a Jasper Conran Merino sweater, while in women’s clothing sequinned party dresses from Red Herring and Julian McDonald have sold well, as have leather bomber jackets from Red Herring

— Among the most popular Christmas presents are remote control aircraft and helicopters

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