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Brand acquisitions drive 12.7% half-year revenue growth at Frasers Group, while property disposals help to boost pre-tax profits by 53%

The first Flannels flagship store is now operating in Liverpool. Image courtesy of Flannels

The first Flannels flagship store is now operating in Liverpool. Image courtesy of Flannels

Acquisitions of businesses from Studio Retail to Missguided and I Saw it First drove a 12.7% rise in revenue at Frasers Group, while property and business sales helped to boost pre-tax profits by 53%. The retail group says it has delivered a strong first-half performance “despite the challenging backdrop of heightened economic uncertainty in the UK, soaring energy costs, rapidly rising inflation, a widespread cost of living crisis and continued geopolitical instability.” It says there are still post-pandemic issues with the global supply chain, but the signs are that these are starting to ease. 

Frasers Group says its elevation strategy is working. Today it works with 19 of the 20 hottest brands in the world, as named by the Lyst index, plans to open six more Flannels stores including a Leeds flagship in 2023 and bought menswear tailoring business Gieves & Hawkes – with its No 1 Savile Row flagship store – out of administration after the end of the first half.

Half-year figures

Frasers Group today reports group revenue of £2.6bn in the 26 weeks to October 23. That’s 12.7% up on the same time last year. Revenue growth was primarily driven by acquisitions, says the retail group – when acquisitions and disposals were excluded, revenues were 3.9% up on last year. 

UK sports retail was the largest part of the business, with revenue of £1.5bn growing by 11.6%, mainly as a result of Frasers’ acquisition of Studio Retail. When acquisitions were excluded, sports retail revenues were 3.1% down on last year, following a fall in sales at Game UK. 

Premium lifestyle was the fastest growing (+24.7% to £533.5m) segment, thanks both to the opening of new Flannels stores and continued online growth. This is the division that now includes pureplay retailers Missguided, I Saw it First and Mysale – all bought during the first half – alongside Gieves & Hawkes.  International retail revenues grew by 5.8% to £492.2m – following its acquisition of Danish sports retailer Sportsmaster in May 2022 and growth in its Malaysian business that offset the disposal of its US retail businesses, also in May.  Revenues from wholesale and licensing grew by 8.6% to £86.2m.

Pre-tax profits of £284.6m were 53% up on last year reflecting, says Frasers Group, improving product choice in the UK business, the growth of Flannels online and through stores, as well as profits on the disposal of property (£91.2m) including a number of retail parks, and US retail businesses (£26.3m) – although these were offset by a series of write downs, including of £50.2m in property values. When acquisitions, disposals and currency fluctuations were excluded, adjusted pre-tax profits grew by 38.8% to £267.1m. The retailer has in place lending facilities of £980m until November 2024, and £930m until November 2025, which can be extended by a year if needed. 

Frasers Group, which sold from 1,596 retail stores as of October 23, also welcomed upcoming changes to the business rates system that will mean businesses have time to adjust to any upwards rates revaluations from April, while benefitting immediately from a downwards valuation.

It says that its House of Frasers business is likely to benefit, “given the significant and disproportionate current cost to House of Fraser” currently. The company also reports that House of Fraser has seen a year-on-year trading improvement.

Frasers Group brands include Jack Wills, ranked a Top50 retailer in RXUK Top500 research, while Evans Cycles and Game are Top100, House of Fraser Top150, Sports Direct Top250 and Flannels Top350.

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