Debenhams to raise funds to cut debt

Debenhams has announced plans to raise £323m from a share sale to cut debts. The department store retailer, which has debts of £900m, said the cash would also help it take advantage of good deals that may emerge during the recession.

Debenhams also reported that like-for-like sales excluding VAT had dropped 0.8% in the 12 weeks to 23 May. But it said the average transaction value was 3% higher than the same period last year.

Debenhams, which has 144 stores in the UK and Ireland, said its Designers at Debenhams range was performing well. “Although the outlook for consumer confidence for the remainder of the financial year is uncertain, given the performance of the business so far this year, at this time the board remains confident in the trading strategy,” said chief executive Rob Templeman.

Mr Templeman said that the share sale would strengthen the company’s finances.