House of Fraser reports Christmas sales decline
Online sales were also down, falling by 7.5%, but on Black Friday were within 1% of last year’s record sales performance.
The department store chain said a reduction in the number of discounted products on offer during the period helped to increase gross margins across the business by approximately 0.5% at constant exchange rates.
In the four weeks to 23 December 2017, a web store profit contribution of £6.1 million was in line with the previous year due to the uplift in gross margins.
House of Fraser said sales during the first week of the post-Christmas sale were “disappointing”, although sales since New Year’s Day have recovered and are broadly in line with last year in both stores and online.
As part of its transformation programme, the company has identified £26 million per annum savings, of which £10 million per annum has already been secured. The retailer said a further £16 million of savings will be delivered in 2018.
Alex Williamson, chief executive of House of Fraser, said: “We are a business in transition; Our focus is on driving profitability rather than chasing revenue at any cost.
“The trajectory of our web business is now back on track following the re-platforming carried out earlier in the year; our investment in our logistics and supply chain is beginning to yield dividends and through the careful curation of our product mix we grew margins over the Christmas period by 0.5%, at constant exchange rates.
“The execution of our transformation plans continues at pace, and we are confident that we will deliver an exceptional experience for our customers and brand partners whilst delivering a sustainable and profitable future for House of Fraser.”
House of Fraser has also reported that it has finalised the terms of the sale of brand names and associated IP of house brands no longer used in the UK to Guangzhou Sunrise Trading for £30 million.
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