- Debenhams grappled with a gloomy high-street backdrop as sales fell by more than 3% over the Christmas period, though it remained on track to deliver profits in-line with market expectations.

The retailer remained on track to deliver current year profits in line with market expectations for earnings per share of 0.5p and profit before tax of about £8.2m as cost savings eased the blow from poor sales growth.

For the 6 weeks and the 18 weeks to 5 January, gross transaction value, a key performance measure, declined 3.8% with group like-for-like sales down 3.4%.

Sales in the UK declined by 3.6%, which the company blamed on weak store footfall, though that was somewhat offset by growth in digital.

For the 18 weeks, group gross transaction value declined 5.6%, with LFL down 5.7%. During the same period UK sales growth was fell 6.2%, International was down 3.5%, while digital sales grew by 4.6%..

The company also warned that gross margins would come under pressure in the first half of the year as it ramped up promotional activity in a bid to remain 'competitive and manage inventory tightly.'

Further asset disposals would be halted until the outcome on talks with lenders was known as the company sought to refinancing existing bank facilities, Debenhams said.

At 8:29am: [LON:DEB] Debenhams PLC share price was -0.16p at 5.49p

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