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House of Fraser posts rise in full year profits

Department store chain House of Fraser has reported an increase in profits in the year to 28 January despite “challenging” trading conditions.

DEPARTMENT STORES

House of Fraser posts rise in full year profits

Department store chain House of Fraser has reported an increase in profits in the year to 28 January despite “challenging” trading conditions.

Pre-tax profit before exceptional items rose to £3.4 million from £1.3 million in the previous year.

Total group transaction value was in line with last year at £1.3 billion while like-for-like sales edged up 0.9%.

EBITDA was down £2.7 million to £63.6 million following a reduction in financial services income of £3.9 million in the first half.

Colin Elliot, chief financial officer of House of Fraser, said: “We are pleased to report another strong set of results despite continued challenging trading conditions across the retail sector. To deliver such a strong set of results for the year is a testimony to the resilience of our business model, and credit to the expertise and dedication of the new senior management team and our thousands of colleagues across the group who strive to exceed our customers’ expectations every day.”

The company saw continued growth in its online business where like-for-like sales were up 16.1%. Ecommerce sales now represent 21.8% of House of Fraser’s total sales.

There was strong growth of 3.6% in branded sales. Concession sales were in line with the prior year while house brand sales fell by 2.1%. Beauty sales increased by 4.1% but womenswear saw a decline of 0.6%.

During the year, House of Fraser continued to invest in its store portfolio including the completion of five store refurbishments in London Victoria, Chichester, Shrewsbury, Darlington and Belfast.

The company will also be anchoring a new shopping centre development in Rushden Lakes in Northamptonshire, which is due to open in the autumn, and has committed to anchor a store at the new Chester Northgate retail and leisure complex in Chester city centre.

Looking at current trading, the company said the volatility experienced throughout the 52 weeks to 28 January has continued into the current financial year. Whilst trading remained subdued in February, the company saw a “significant” improvement in March with its performance ahead of expectations.

Frank Slevin, executive chairman of House of Fraser, said: “The retail environment is changing and we must continue to innovate, challenge and strive to be what our customers want us to be. The strengthened leadership team have meticulously reviewed every part of our business and have set out a clear vision for the future direction of the business.”

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