Sales growth for Debenhams' existing stores has been flat

In a trading update for the year to 2 September, the department store said sales had risen just 0.5% in the same stores it had open a year ago.

But profit margins are improving, and new Debenhams' stores have grown overall sales by 6.6% on last year.

The retailer said trade had picked up since early summer, led by its Femme Fatale designer fashion range.

Trading conditions

There are signs that trading conditions are improving Rob Templeman, Debenhams chief executive

The news sent Debenhams shares higher in morning trade, where they stood at 192p at 1000 BST, a gain of nearly 4% on the day.

The group listed on the stock market back in May when its shares debuted at 195p. It had previously been in private equity hands for two and a half years.

"We are pleased with our performance and remain well placed as we enter the new financial year," said chief executive Rob Templeman.

"Although, as widely reported, the retail market was challenging in the early part of the summer, there are signs that trading conditions are improving."

In August, the group agreed to buy nine outlets in the Republic of Ireland from Roches Stores, taking its department store portfolio in the UK and Ireland to 131 shops.

It also has five Desire stores, a boutique format that sells more select fashions, lingerie and perfumes.