HoF losses widen as transformation costs bite

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House of Fraser has posted widening losses and a drop in like-for-like sales in its half-year update, but new boss Alex Williamson is “optimistic”.

The department store retailer recorded an adjusted EBITDA loss of £8.6m in the 26 weeks to July 29, in comparison with a £0.9m loss for the same period last year.

The retailer’s gross transactional value for the period was £545.8m as like-for-like sales slumped 5.2% and online sales dropped 9.8%.

House of Fraser attributed falls in its in-store and online sales to the launch of its £25m web re-platforming programme in April and subsequent disruption to its ecommerce channel and clearance of five of its now-terminated in-house womenswear brands.

The retailer’s majority shareholder Sanpower ploughed a further £15m into the business this month to support its ongoing transformation plan.

This investment comes in addition to the £10m provided by Sanpower during the period to invest in House of Fraser’s £18m distribution centre overhaul programme.

The department store retailer opened its first new store in nine years last month and shuttered a loss-making store in Leicester.

Store gallery: Bucher’s first Debenhams , Stevenage

New chief executive Alex Williamson said: “House of Fraser has many wonderful qualities and I have high expectations for the business. My observations after a few weeks are that since Sanpower acquired the business in 2014 the primary focus has been on stabilising an enterprise that had been starved of investment for many years.

“Whether it be refinancing the business, the investment of over £100m in capital expenditure since the acquisition or a root and branch upgrade of the executive team, much has already been done to prepare us for significant transformation.

“This is just the start of our journey with several other projects designed to provide additional sales and costs savings as part of the overall transformation programme due to commence shortly.

“I am excited about what lies ahead for the business and I am optimistic for the future. With the support of Sanpower, we are building the right foundations that position us well to deliver on our ambitions for sustainable profit growth.”