Department store chain House of Fraser saw its underlying profitability decline last year due to the associated costs of opening a new warehouse and improving its multichannel offering.
A full-year trading update published by the retailer today shows that like-for-like sales rose three per cent year-on-year but EBITDA dropped from £69.7 million to just £58.6 million over the period.
Along with a second distribution centre the group also launched a re-designed website, two new house brands and two concept stores under the banner of Houseoffraser.com.
Don McCarthy, Chairman of House of Fraser, said: “Considering the market conditions, uncertainty in the economy and the unseasonably warm autumn we believe our results are in line with fashion retailers in our sector.
“2011 was another year of investment for us, as we continued to focus on the fastest growing areas of our business.”
Total gross profit, before certain deductions, increased by almost ten per cent to £399.1 million during the year thanks to strong sales across the group.
In response to the site re-launch, online sales jumped by 92 per cent to represent 7.4 per cent of House of Fraser’s total sales during the year, and Houseoffraser.com has now become the biggest ‘store’ in the retailer’s portfolio.
McCarthy added: “Looking forward, it is difficult to predict when market conditions are likely to improve. However, we remain positive that our multi-channel strategy, combined with the strength of our brand offering will continue to support the successful development of the business.”