House of Fraser profits jump but it warns of volatile trading
Department store group House of Fraser grew profits from £1.3m to £3.4m in the year to 28 January 2017 on flat revenue but has warned that the volatile trading it witnessed last year will continue throughout 2017.
Revenues at the group remained flat at £1.3bn while like-for-like sales nudged up 0.9%. Online sales grew strongly, by 16.1%, and now account for just over one fifth of all sales.
CFO Colin Elliot commented: "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.”
Sales of branded products achieved "strong growth" of 3.6%, but house brands fell by 2.1% and the business had previously announced it intended to shake-up its brand mix to better appeal to its core customer base, which is a degree educated woman with a higher than average income and with children. It also plans to introduce more experiential elements to its stores, such as champagne bars and restaurants, to increase dwell time. Womenswear sales dropped by 0.6% during the year but beauty was up 4.1% and all other categories were up.
Last year it brought in former ASOS director of product and trading Maria Hollins who is carrying out the same role for the department store and David Walmsley, former digital director at Marks & Spencer, was recruited as chief customer officer to oversee the changes. It is, however, now looking for a new CEO after Nigel Oddy left the group after 10 years with the company and two years in the top job. It has been reported that Oddy had strategic differences with its owner, Chinese conglomerate Sanpower Group, who acquired House of Fraser in 2014.
The group carried out five store refurbishments during the year at London Victoria, Chichester, Shrewsbury, Darlington and Belfast. It is also set to anchor a new shopping centre development in Rushden Lakes in Northamptonshire, due to open in Autumn 2017, and the new Chester Northgate retail and leisure complex in Chester City Centre. And, at the end of last year, opened its first store in China, in Nanjing.
The company also launched a £25m upgrade of House of Fraser’s ecommerce platform this month.