The news came as the company confounded recent high street gloom by posting a big rise in profits and sales.

The Leith branch of Debenhams will be close to the new home of the royal yacht Britannia

New shops are to be built at Basingstoke in Hampshire and at Leith, near Edinburgh.

The two shops should open in 2001 and employ around 450 people in total, split between the two sites.

The company said the announcement meant that within a five year period it would open 19 new branches - four of which are already trading.

Growing ambition

"This represents the biggest expansion programme in Debenhams' history," said chief executive Terry Green.

"These stores are part of our planned capital investment programme and they will be funded out of our internally generated cash flow over the next five years."

Mr Green said that by the time the current expansion programme had been completed, the group would have boosted its floorspace by 26% since it was split off from Burton Group earlier this year.

The Leith branch will be at the new Ocean Terminal shopping development, close to the new home of the royal yacht Britannia.

A modernisation programme is also being carried out across the chain.

Strategy pays off

"The key to our expansion programme is that our new stores are located in some of the UK's most important and prestigious retail locations," Mr Green added.

"These are markets which we would want to be in under virtually any economic conditions, and these new stores will add significant sales."

In the year to August 29, Debenhams made a pre-tax profit of £138.6m on £1.36bn turnover.

This compares with £119.6m on £1.28bn during the previous 12 months.

Chairman Peter Jarvis said "These results demonstrate the resilience of our strategy in difficult trading conditions and are a testament to the quality of our management and staff.

"For the sixth consecutive year we have driven sales higher, improved the operating margin and managed costs effectively."

Mr Jarvis added that in the seven weeks since the end of August, total sales were ahead of the same period last year.

Even with the effect of new openings stripped out there was still what he described as a "small" improvement.

"We continue to outperform the sector and see this as a satisfactory performance given the tough retail environment," he insisted.

The final dividend of 5.9p makes a total for the year of 9.8p.

Last week Arcadia - the company formed from the rest of the old Burton Group - also reported a healthy rise in its sales and profit before tax.