House of Fraser full year EBITDA rises as online and own brand thrive

Like-for-likes edged up 3.6% to £1.2bn over its year to January 25 and gross profit hit £430.6m, its highest ever level, up £26.8m.

Gross margin jumped 108 basis points over the year at House of Fraser, which confirmed its sale to Chinese conglomerate Sanpower over the weekend.

The good performance continued into the new year as sales edged up 3.3% in the 11 weeks to April 12.

In its full year, online sales soared 41% helped by House of Fraser’s website redesign and its improved delivery options. 

Own brand was also a star performer with sales jumping 13% and cash margins advancing 20%. The retailer said Linea, Dickins & Jones womenswear, Label Lab and Howick menswear performed particularly well.

Its premium offer was also strengthened by the introduction of Boss womenswear and Hallbuber.

House of Fraser chief executive John King said: “Our online business has performed exceptionally strongly and has substantial future potential.

“Our house brands sales grew significantly in the year and we achieved our highest house brand gross margin rate to date. We have strengthened our relationships with our brand partners and continued our collaborative approach to improving store environments. This helped us to deliver sales growth from our bricks and mortar stores, on top of the growth delivered in the previous year.

“Overall, we have continued to enhance our premium department store positioning and this is reflected in our positive current trading. The management team and I are really looking forward to working closely with Nanjing Cenbest and the wider Sanpower group to enable House of Fraser to further develop the business domestically and internationally.”

The retailer, which opened its first overseas store in Abu Dhabi over the year, is plotting its expansion in China with Sanpower.

House of Fraser executive chairman Don McCarthy said: “ The market continued to be highly competitive and accordingly we were pleased to have delivered another improvement in group profitability and a reduction in net debt.

“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.

“The acquisition by Nanjing Cenbest will allow House of Fraser’s management team to continue to grow and invest in the business in the UK and Ireland, provide a strong platform from which to expand the brand in international markets and to further develop our multi-channel, stores and premium fashion offering.”

McCarthy is stepping down from the retailer following its sale to Sanpower.

The department store reduced its debt by £25.8m over the year to £131.4m.