House of Fraser has revealed falling sales amid its Christmas trading update just days after calling for the “support” of landlords to reduce its rent prices.
In the six weeks to December 23, store sales dropped 2.9 per cent, despite a 0.8 per cent rise over its “record” Black Friday event.
Overall sales were marred by a 7.5 per cent drop in online transactions, which again saw a positive spike of one per cent during Black Friday.
Gross margins increased 0.5 per cent thanks to the department store’s strategy of reducing discounted items.
In the post-Christmas period, the retailer admitted to having “disappointing” sales, although it has reportedly seen some recovery in the new year both online and in store.
The news comes after recent reports that House of Fraser was seeking to reduce its rents, proving to be a warning sign for many investors.
While no store closures are planned as yet, it is reportedly looking to reduce its store size by roughly a third.
House of Fraser has stressed that it is a “business in transition” and is in the middle of a large scale transformation strategy which saw cost savings of £10 million last year, with a view to saving a further £16 million this year.
“Our focus is on driving profitability rather than chasing revenue at any cost. We are not a business determined to sell everything to everyone at any price,” chief executive Alex Williamson said.
“The execution of our transformation plans continues at pace, and we are confident that we will deliver an exceptional experience for our customers and brand partners whilst delivering a sustainable and profitable future for House of Fraser.”
Executive chairman Frank Slevin added: “I am satisfied with the performance of the group over the Christmas period, delivering a credible performance in what was a very difficult retail market.
“Alex and the team have made excellent progress in delivering our Transformation Programme as we prepare ourselves for the challenges that lie ahead, and with the continued support of our shareholder we look forward to an exciting future for House of Fraser.”