House of Fraser sees slower sales
British department store group House of Fraser posted higher profits today but found its progress overshadowed by a sluggish start to the new financial year.
The group, which has 46 outlets, said profits before property gains rose to £28.2m (€40.6m) in the year to January 29, up from £27m (€38.8m) last time.
Fraser said initial trading for the spring fashion season had been slower than a year earlier but that it was “optimistic” the situation should improve. It also blamed the slowdown in the housing market for a disappointing start in the home department, which accounts for less business than fashion.
In the first six weeks of the year, Fraser said like-for-like transaction values were down 4%, compared with a more resilient performance of minus 0.6% during the previous financial year.
The comments echoed the rest of the retail sector, following a recent profits warning from Boots and a 1% drop in sales at John Lewis department stores.
Chief executive John Coleman said the last year had been one of “significant development” for House of Fraser after raising £35m (€50.4m) from property transactions and achieving a strengthening in its balance sheet.
Debt levels reduced by £5.3m (€7.6m) to £58.5m (€84m) after a year in which the company spent a record £67m (€96.4m) on capital investment, mainly on refurbishments and the fit-out of new stores.
In September, the company opened its largest store to date – a 140,000 square foot site at Croydon – while the second phase of a refurbishment in Manchester was also completed and new stores opened in Dublin and Maidstone.
A new outlet for Norwich is planned to open in the autumn.
In addition to Belfast and High Wycombe due to open in 2007, the group has added to the pipeline of new stores with plans for sites at Chester and Bristol.
