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Sales and profit up at House of Fraser

Business |REPORT

Sales and profit up at House of Fraser

By Prachi Singh

22 Sep 2015

Highland Group Holdings, the parent company of House of Fraser, for the 26 weeks to August 1, 2015 said that total GTV increased to 574.2 million pounds (887 million dollars), on like-for-like sales growth excluding VAT of 6.5 percent. Online sales excluding VAT increased by 30.8 percent, and now represent 17.5 percent of sales.

“We are pleased with the continued sales and profit growth in the first half of this year. Both stores and online have delivered positive sales and margin growth, building on the performance we have seen in both these channels in recent years, demonstrating the truly multichannel nature of our business,” said Nigel Oddy, House of Fraser CEO.

Positive performance across categories

The group witnessed continued sales growth in bricks and mortar stores, with like-for-like sales growth excluding VAT of 2 percent. Gross profit of 204.7 million dollars (316.2 million dollars), increased by 11.3 million pounds (17.4 million dollars) over last year. Adjusted EBITDA for the first half increased 7 percent.

Sales in all categories and routes to market went up on last year. House brands, branded and concessions were up 2.1 percent, 7 percent and 6.7 percent respectively. The company witnessed particularly strong performances from menswear, up 10.5 percent, and home, up 7.8 percent.

The company strengthened its premium branded proposition with rollouts and introductions of numerous brand and concession partners including Victoria Beckham Jeans and Rugby World Cup branded products. It also undertook an extensive refurbishment work in Huddersfield and Lincoln, with upgrades and improvements to Metro Centre, City, Bluewater and Leeds underway. A second international franchise store on Yas Island, Abu Dhabi opened in June 2015; and the company continued progress on development plans in China, through House of Fraser Group, with first store planned to open in 2016.

Current trading and Q3 outlook

The opening weeks of the third quarter saw challenging trading in August, as witnessed across the retail sector, and an improvement in September, with cumulative LFL sales up 5.1 percent for the first 33 weeks of fiscal 2016. The Group remains optimistic for a successful Autumn/Winter season.

“We have continued to invest in our UK business to remain at the forefront of retail innovation by developing our multichannel offering, enhancing our store portfolio, growing house brands and introducing exciting premium brands. This focus on our key strategic pillars has also been reflected in our current trading. We continue to make progress on our international expansion plans and remain excited by our future growth opportunities both in the UK and abroad,” added Oddy.