House of Fraser has increased profits for the first half of its financial year after putting in a strong trading performance in difficult market conditions.
The London-headquartered department store posted profits of £94.9m for the six months to July 30, an increase of £4.4m on last year’s figures. Like-for-like sales went up by 5.3 per cent over the same period.
House of Fraser also saw the benefits of redesigning and relaunching its website. The company said its website now generates more sales than any of its stores, with online trading jumping by 107 per cent.
However, chief executive John King warned that sales were down in the second half until a surge in the final few weeks, despite earnings before interest, taxes, depreciation, and amortization (EBITDA) and net debt improving in the first half.
The department store’s like-for-like sales for the opening seven weeks of the second half of its financial year went up by just 1.9 per cent. The figure dropped one per cent in the first three of this seven-week period, mainly due to the civil unrest in a number of English cities in August.
“Our first-half performance is testament to the fact that we are taking the right steps to fulfil our customers’ needs,” said King.
“There is no doubt that market conditions will remain challenging, and we will remain cautious for the remainder of the year, however we believe that our investments in our multi-channel operations and store refurbishments combined with our exclusive House Brand offering, will continue to deliver growth.”
A total of 16 brands are now exclusive to the House of Fraser after it introduced four new labels during the year. Kenneth Cole and Shabby Chic have been added to the home department, while Howick and Label Lab are now in menswear.
Costs went up to £5.1m due to an increase in volume caused by multichannel operations and the opening of a new distribution centre in Wellingborough, but net debt fell to £235.4m in total, a drop of more than £40m.
House of Fraser has 61 stores across the UK and Ireland with a total selling space of 4.9 million sq ft. The retailer’s head office is on Baker Street and it employs approximately 5,200 people.
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