Department store group Debenhams reported a £9 million drop in full-year profits.

But the company said that against a background of tough market conditions, its performance had been "very creditable".

The group, which last month appointed trading director Belinda Earl as its chief executive to replace Terry Green, said pre-tax profits for the year to August 26 had fallen to £129.6 million from £138.8 million.

Finance director Matthew Roberts said the drop was the result of increased spending during the year on internet, home shopping and advertising. The group pumped £6 million into internet and home shopping and £5 million into a TV-biased advertising campaign.

Mr Roberts said, although the High Street had been a tough market, "we are pleased with our performance".

During the year, turnover rose 1.4 per cent to £1.4 billion and, on a like-for-like basis, stripping out the effect of new store openings, sales rose 1.8 per cent.

Chairman Peter Jarvis said the group was "well positioned to continue to outperform competitors".

"These full-year results represent a very creditable performance bearing in mind the difficulties in the market," he said. "The sales trend over the year improved as we adapted to the challenging environment."

In the seven weeks to October 14, sales were up 11.5 per cent, with like-for-like sales 7.5 per cent ahead.

The group increased its market share of the department store market to more than 13 per cent, according to research carried out by retail consultancy Verdict.

During the year it also opened four new stores in Dundee, Reading, Weymouth and Banbury and since the end of August had opened in Sunderland and Milton Keynes.z