The Group’s gross transaction value grew by 0.2% during the 52 weeks ended 29 August 2009 to £2,339.7 million (2008: £2,336.0 million) and revenue was up by 4.2% to £1,915.6 million (2008: £1,839.2 million).
These increases were primarily from our own bought ranges, including our exclusive Designers at Debenhams offer, and were supported by, good sales performances in new stores. During the year we have seen trading space being converted from concession to own bought ranges and the introduction of a number of new brands and departments.
However, like-for-like sales declined by 3.6% in the financial year, reflecting the difficult trading environment and disruption to sales in the fourth quarter arising out of the space move programme.
Continued growth was achieved from our internet business, with sales increasing 31% to £55.1 million (2008: £42.1 million) during the year.
At the same time we have changed our fulfilment partner and we expect to be able to deliver new functionality and cost savings from this transfer.
The international business has continued to grow and over the past 12 months we opened 11 new stores. At the year end we were represented in 17 countries with a total of 52 franchise stores with sales of £63.3 million, up 13.6% on the previous financial year (2008:
£55.7 million).
Gross margin increased by 70 basis points over the previous financial year. This was driven by the higher mix of own bought sales, the tight management of costs and stocks and historically low levels of terminal stock, which resulted in lower markdown during sale periods. The effect of our 18-month hedging policy has also reduced the impact of US dollar movement during the year.
Control of costs is critical, particularly in the current economic environment, and further significant cost savings have been made during the financial year in addition to those achieved during the second half of last year. Overall store operational costs increased, primarily due to new store openings, but like-for-like stores saw a decrease in costs of 0.4%. This combined to generate gross profit during the financial year of £264.9 million (2008: £267.6 million).
Distribution costs decreased by £4.7 million, due to tighter control of stocks and transport schedules alongside warehouse labour efficiencies. Administration costs were also down £4.1 million reflecting the full year impact of changes implemented last year and the ongoing challenges to the cost base.
Operating profit in the financial year ending 29 August 2009 increased to £182.2 million (2008: £176.1 million) and profit before taxation grew to £120.8 million (2008: £105.9 million).

Discussion points 

1 How does the company describe its trading performance?
2 How does the company measure trends in operating performance?