Jan. 7--THIS Christmas was billed as the bloodiest the High Street would ever see. Shop windows were plastered with posters screaming that prices had been cut by 40, 50, 60pc (although all but the most short-sighted passer-by would have spotted the ubiquitous "up to" prefix). Woolworths went under. MFI closed. Retailers, we were told, were slashing prices so hard that profit margins had virtually disappeared.

Come the New Year, shoppers who had stuffed their wardrobes with clothes bought in sales that had started well before Christmas had the smug satisfaction that they had paid well below full price.

Meanwhile, investors held their collective breath: had Christmas really been the disaster for retailers? Just how vicious had the downturn been?

Yesterday, those investors got their answer -- or at least part of it. Department store group Debenhams, one of the chains that had trumpeted most loudly its pre-Christmas price cuts, saw its shares soar by more than a fifth after it reported only a small fall in underlying sales.

Much more significantly, the group disclosed its gross margin -- the difference between how much if pays for its merchandise and the price it sells -- was virtually the same as a year ago.

Fashion chain Next also delivered an update. Underlying High Street sales were down by 7pc in the five months leading up to Christmas -- and in the last few weeks of that period, the sales decline was nearer 9pc. But the fall was scarcely catastrophic -- and had been forecast by the company months ago.

Next doesn't give specific information about profit margins. But it said yesterday that it started its post-Christmas sale with less stock in its shops than on Boxing Day 2007, suggesting that gross margins this year may even be slightly ahead of forecasts. Full-year profit targets should be reached.

If the past couple of months were a bloodbath on the High Street, there was precious little sign of it from these two big-hitters. New Look, the privately-owned chain that bills itself as selling "fast fashion," was also upbeat. Sales are up and margins were well ahead.

Put it all together, and the message from yesterday's trading statements seemed simple: crisis, what crisis? Was the idea that retailers have been painfully squeezed simply a popular myth?

Not entirely. Today will see Marks & Spencer, still the grande dame of British retailing, deliver its trading update, and few expect it to make pretty reading.

Without question, M&S's sales will show a fall. Some predict an underlying decline in takings for non-food of around 8pc.