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House of Fraser reports 57% online growth, though multichannel investment leaves profits flat

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House of Fraser this week reported 57% growth in its online sales, and said rising numbers of buy and collect sales were bringing more shoppers into its stores.

It also said it expected its investment in multichannel to pay dividends in the second half of its financial year, after a first half that saw top-line profits stay flat.

Like-for-like sales at the department store group grew by 3.3% in the six months to July 27, while gross transaction volumes rose to £522.1m. The company also reported growth in its own label business, up by 13% in the half year, and refurbished stores, with sales at its Oxford Street site up by 10%.

But earning before interest, tax and write-offs stood level at £7.5m over the period.

“We took deliberate action to invest in our multichannel and house brand businesses which has meant higher costs in the first half resulting in EBITDA being level,” said chief executive John King.

“However we expect that this investment will deliver growth for the second half. We remain confident that the group’s business model, with our premium brand positioning, growing house brand mix and multichannel operations, positions us strongly for the foreseeable future.”

During the first half, House of Fraser took a range of new brands, including Superdry, online, launched later order times for its buy and collect and home delivery services, and unveiled a new mobile site and iPhone app.

The company said trading in the first eight weeks of the second half, to Saturday September 21, was positive, with like-for-like sales up by 1.1%.

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