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HOF reports record rise in LFLs

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Department store House of Fraser (HOF) has seen like-for-like (LFL) sales climb a record 3.3 per cent to £1.2 billion over its full year as it reported growth across all categories, figures released today reveal.

In the 52 weeks ended January 26th 2013, adjusted EBITDA rose 4.3 per cent to £61.1 million while the retailer amassed its highest ever gross profit, up £4.7 million to £403.8 million.

Amid further investment in its multichannel operations which has seen the retailer enhance its website, improve its delivery proposition and expand its product offering, online sales jumped 53 per cent on the same time last year and now represent 10.9 per cent of sales.

Range extension has boosted sales performances across HOF’s House Brands while its premium brand offering has grown over the period “with introductions and rollouts of numerous brand and concession partners”, a statement from the retailer said.

Own store refurbishment continued during the year, notably at HOF’s Oxford Street flagship and the retailer noted that invested stores had reported positive performances.

CEO of HOF John King said that the results were to be praised given the struggling economy, commenting: “We are pleased to report record sales and margins for the year despite the difficult market conditions.

“The growth has been driven by continued success of our key strategic pillars. Our award-winning multichannel business has performed exceptionally well and has substantial future potential, including internationally.

“Our House Brands grew significantly in the second half of the year and this trend has accelerated during the first quarter.

“We have strengthened our relationships with our brand partners and continued our collaborative approach to improving store environments and selectively refurbishing stores which have generated sales growth and positive returns.

“Overall, we have continued to enhance our premium department store positioning and this is reflected in our strong current trading.”

Such solid results come at a crucial time for the retailer after it emerged earlier this month that it is the subject of a possible bid from the Qatari Royal Family in a deal valuing the chain at £300 million.

While the retailer made no comment on the speculation, it announced that LFL sales in the first 13 weeks to April 27th 2013 grew 4.8 per cent as it starts its new financial year in a strong position.

Don McCarthy, Chairman of HOF, said that the management team had worked hard during the year to develop and modernise the business a part of its wider strategy.

He added: “General market conditions continued to be challenging, particularly in the first half of the year, and accordingly we were pleased to have delivered an improvement in Group profitability and a reduction in net debt.

“We expect economic conditions to remain subdued and it remains difficult to assess when market conditions will improve.

“Nevertheless, we are confident that the Group’s business model, with our premium brand positioning and strong multichannel operations, is highly relevant to changing consumer habits and are confident that the Group will continue to grow and develop for the foreseeable future.”

Published on Wednesday 22 May by Editorial Assistant

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