Britain’s second largest retailer remains bullish as profit forecasts exceed expectations.

Debenhams announced yesterday that its yearly pre-tax profit would likely rise by 20m per cent. The increase comes on the back of designer range performance and online sales.

The company predicted that it would hit the £150 million profit mark, with the recent trends of store expansion and discounting helping to fuel coffers by £3 million over what analysts had previously forecast. However, at stores that had been open to the public for at least one year, overall sales were flat compared with the previous 12 months.

Despite the unsteady consumer environment, which has seen the public sector suffer widespread job cuts, material costs rise and austerity measures hinder spending, Debenhams has been able to produce the upbeat estimate which covers the year until 28 August. Deputy chief executive for Debenhams, Michael Sharp, said the store was well placed to cope with what has been a challenging storm. Mr Sharp said the impending VAT rise was an obvious concern for all retailers, but that his company’s commitment to offering the right products at right prices had served them well in times of financial hardship. Mr Sharp also acknowledged that online sales had seen a significant rise, with many customers trending towards the time and money saving alternative.

With 160 stores across Britain and Ireland, Debenhams is the UK’s second largest sales retailer behind John Lewis, and also features stores in Denmark and over 60 franchised outlets overseas.

The discount fashion chain store that became a success story on high street has had its bubble burst.

Primark, whose expansion drive has placed them on many British shopping lists, has reported slow summer sales as consumer confidence took a battering.

Shares in Associated British Foods (AB Foods), the firm’s parent group, fell 1.5 per cent as the news became known of marked slowdown in sales growth.

While full-year budgets and profit earnings for the retailer are still on track to beat forecasts, Primark warned that tough times lie ahead as increased living costs and the impending VAT changes would spell trouble times in 2011. The fashion industry is now bracing itself for the next round of sales updates from fellow high street staples Next and Debenhams, due out next week, with analysts anticipating that similar grim outlooks will be commonplace.

The Primark chain, which consists of 204 retail outlets, makes up one-third of the group’s profit at AB Foods. Its like-for-like sales slowed in the three months till mid-September by around 4 per cent, meaning the year now sits at an increase of 6 per cent following the 8 per cent first half performance.

John Bason, AB Foods finance director, said that the previous fourth quarter sales, made longer by an Indian summer in 2009, meant that the last quarter showed a decline of closer to ten per cent. Bason added that Primark would remain cautious in the way it handled the outlook and the UK consumer.

The wealthy are being urged to follow the lead of Lord Sainsbury.

The philanthropic Tory peer has made a £25 million donation to the British Museum, in what could herald a new shift in funding.

The culture secretary, Jeremy Hunt, called on the rich of Britain to do more to fund the preservation of cultural institutions on Sunday, after the Lord Sainsbury pledge has outstripped government funding on its own. Hunt said that the government did not wish to rely on the generosity of private individuals to fill the funding gap in the culture budget, which has been shaved by 25 per cent, but added that he hoped more like Lord Sainsbury would come forward to help bankroll national institutions.

The donation, which was the largest in Britain since the National Gallery was given £50 million in 1995 by Sir Paul Getty, naturally delighted museum officials who have been anxiously awaiting on news for how to go about managing their own funding cuts.

The money from the donation will go towards a new Lord Rogers-designed £135m exhibition space and conservation centre, which will house temporary, blockbuster shows and play home to specialist conservation laboratories. Popular exhibits, including the soon to be released Book of the Dead show on Egyptian antiquity, are currently displayed in a temporary viewing area inside an old reading room. The government had initially promised to donate 22.5m for the new facility, with around 70 per cent of the funding target now met.

Sainsbury’s has bucked the economic trend away from spending on new technology.

Investment in technology in the retail industry is set to be stagnant in the UK for the foreseeable future, as most high street stores and supermarket chains brace themselves for another economic downturn.

The austerity budget and impending VAT rise has seen widespread speculation that the industry could be confronted with a period of loss, leading to financial outlays for development of existing technology to be capped as most leading companies say that they have no IT overhauls planned. In some cases, computer systems are up to 20 years as old but are kept on as long as they do the job.

According to a report published last week by Martec International, a leading retail sector consultancy specialist, Tesco is the retailer that seems most content with its incumbent IT system. Their latest upgrade was in 2007 while the yearly spend on IT investment is £200 million. Rival Sainsbury’s spends around £220m per year on IT according to the Martec study, which also reported that UK’s leading supermarket chain is planning on updating its store, e-commerce and supply chain systems next year. The in-house system used by staff, installed first in 1995, will be upgraded the following year.

While Frances Riseley, practice manager at Martec, said that many retailers were hesitant to reveal their IT plans for fear of rivals being alerted to their developments, his group’s survey did establish that 19 per cent of the 142 British retailers polled said the reason for not revealing any details was that they were either being finalised or had not been considered.

Leading fashion retailers H&M and Zara will both go live online in September.

From next month, shoppers who are based outside of the London store range will be able to buy their favourite outfits via the internet as the clothing providers attempt to buck the increasingly dour trends hitting the high street.

Zara, which is owned by the Spanish company Inditex, will launch its new website simultaneously across the UK, Spain, France, Portugal and Italy on September 2, and while they have previously offered a range of homewares online, the revamped website will mark the debut of fashion lines that have in the past been only available in-store. H&M will launch its new online venture a fortnight later, offering men’s, women’s and children’s clothing in addition to their own range of homeware.

The current gloom facing that has beset consumer confidence in the UK and across Europe has led several major retailers to warn that widespread cuts in public sector spending will have a knock-on effect for individual customers. The recent austerity budget from Chancellor George Osborne had created increased worry across the UK over employment and wage prospects, leading to a tightening of the purse strings.

Both Marks & Spencer and Next have warned that consumer spending is likely to be constrained in the coming months as the new coalition government’s emergency budget combines with the rise of VAT at the end of the year to keep customers out of high street shops.