A strong trading performance in tough conditions allowed department store group House of Fraser (HoF) to today report an increase in profits for the first half of its financial year.
In the second quarter ending July 30th 2011 gross profit improved by £4.4 million compared to last year to total £94.9 million, whilst like-for-like (LFL) sales grew by 5.3 per cent year-on-year during the first half of the year.
Sales of its own brand items rose by 32 per cent in the half but most impressive of all was a 107 per cent jump in online trading after a successful redesign of the company’s website.
Despite significant improvements to the retailer’s EBITDA and net debt in H1, John King, CEO of HoF, cautioned that sales had been slower during the beginning of the second half before picking up in the last few weeks.
LFL sales for the first seven weeks of House of Fraser’s second half grew just 1.9 per cent, after declining one per cent in the first three of these weeks caused largely by immediate and knock-on effects of the civil unrest seen in August.
King said: “Our first-half performance is testament to the fact that we are taking the right steps to fulfil our customers’ needs.
“There is no doubt that market conditions will remain challenging, and we will remain cautious for the remainder of the year, however we believe that our investments in our multi-channel operations and store refurbishments combined with our exclusive House Brand offering, will continue to deliver growth.”
Four new House Brands have been introduced during the year, Label Lab and Howick tailored in menswear and Shabby Chic and Kenneth Cole in the home department, making a total of 16 brands now exclusive to House of Fraser.
The opening of a new distribution centre and an increase in volume caused by multichannel operations and own brands pushed costs up £5.1 million in the period but net debt fell over £40 million to £235.4 million in total.