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Ecommerce drives House of Fraser sales growth

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House of Fraser today showed that ecommerce was the driving force behind sales growth of 4.5% in its latest financial year.

While online sales grew by 26.8% to represent 18.9% of total sales in the 52 weeks to January 30 2016, store sales were almost flat at 0.1% up on last year on a like-for-like basis, which strips out the effect of store openings and closures. Overall sales hit a gross transaction value of £1.3bn, 4.2% ahead on a like-for-like basis.

The department store, an Elite retailer in the IRUK Top500 research, turned in its first pre-tax profits since 2006, of £1.3m.

The results follow a year of investment in IT and ecommerce. Improvements to the group website have enabled the launch of a new Australian website this month, while the online Recognition loyalty scheme has been further developed. In fulfillment, improved Buy & Collect areas have been put in place in 17 stores, while delivery upgrades include the introduction of next-day before noon and afternoon.

The group also refurbished six stores over the course of the year, as well as signing up as anchor tenant at the Rushden Lakes shopping centre development in Northamptonshire. It now plans to open its first store in China later this year.

Chief executive Nigel Oddy said its first profit in 10 years was driven by “continued progress across both our online and bricks and mortar stores, despite the volatile trading environment in the final quarter of fiscal year 2016.”

He added: “We have continued to invest in our business throughout the year, strengthening our multichannel proposition and enhancing our store environments with six extensive store refurbishments completed in the year.

“This investment will continue in fiscal year 2017, when we plan to refurbish further stores and continue to develop our IT and ecommerce capabilities.”

He said the group was cautiously optimistic for the coming year, although sales for the first ten weeks of the year were flat as a result of “challenging trading conditions, as seen across the retail sector.”

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