House of Fraser optimistic on future growth despite sales fall
In the 26 weeks to 29 July, total group transaction value was £545.8 million while like-for-like sales dropped by 5.2%. Due disruption to its ecommerce business, online sales were down 9.8% in the period.
The company has also reported an EBITDA loss of £8.6 million with gross profit falling to £196.9 million from a previous £207.2 million.
Last year House of Fraser launched a transformation programme which involved a £25 million re-platforming of its ecommerce business. Following the launch, web sales were disrupted as the new platform stabilised. The company said good progress has been made in recovering sale volumes and that it expects to be trading normally by the beginning of the final quarter of the year.
Reporting on progress with its transformation plan, House of Fraser said it has completed the launch of its new womenswear house brand range. In addition, it has embarked on a £18 million investment in its distribution centre to increase capacity, drive operational efficiencies and improve profitability. This is expected to deliver £5 million of efficiency savings in the second half of the year,
The company has also opened a new store for the first time in nine years at Rushden Lakes.
Alex Williamson, the recently appointed chief executive of House of Fraser, said: “House of Fraser has many wonderful qualities and I have high expectations for the business. My observations after a few weeks are that since Sanpower acquired the business in 2014 the primary focus has been on stabilising an enterprise that had been starved of investment for many years.”
“Whether it be refinancing the business, the investment of over £100 million in capital expenditure since the acquisition or a root and branch upgrade of the executive team, much has already been done to prepare us for significant transformation.
“I am excited about what lies ahead for the business and I am optimistic for the future. With the support of Sanpower, we are building the right foundations that position us well to deliver on our ambitions for sustainable profit growth.”
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