Store refits and volatile conditions hit HoF’s H1 sales

By

Barbara Santamaria

Published
Sep 27, 2016

British department store House of Fraser announced on Tuesday that total sales for the first half of the year remained in line with the prior year, totalling £573.5 million.

Excluding Virgin Travel, the business increased branded and concession sales by 0.9% on a like-for-like basis, while House brand sales declined by 3.7%. The home segment reported the strongest performance with sales growth of 4.5%. Menswear and beauty also delivered sales growth of 1.8% and 1.9% respectively.

House of Fraser blamed an “extremely volatile trading environment” and its store refit programme for the flat sales growth. In the period, the retailer carried out refurbishment works in five stores, which are due to be complete by the end of October or early November.

With a 17.8% growth on a like-for-like basis, online sales now represent 20.7% of total sales.  

Gross profit for the period was up to £207.2 million -  £2.5 million more than the prior year, while EBITDA decreased to £1.1 million, due in part to a £3.9 million reduction of financial services income following the expiry of a financial services contract.

Nigel Oddy, CEO of House of Fraser said: "We have, like many of our peers, experienced an extremely volatile trading environment since the final quarter of Fiscal Year 2016, and we expect this uncertain economic situation to remain for some time. Despite these challenging market conditions, we are pleased to have delivered like-for-like sales growth, improved cash and gross margin and increased gross profit in the first half. This is a real credit to our business and our teams.”

The upmarket retailer said the second half of the year has got off to a weak start, with a 2% sales decline in the first weeks of the third quarter. Despite this, the company remains confident and expects the Black Friday and Christmas period to give its full year sales a boost.

"With the calibre of our management and our ambitions for growth, we remain confident that our strategy, premium positioning, multichannel offering and leading brand proposition position us well for the future to create value for all our stakeholders, said Frank Slevin, Executive Chairman of House of Fraser".