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Move upmarket through £100m ‘elevation without limits’ strategy starts to bear fruit for Frasers Group

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Frasers Group today said its £100m ‘elevation without limits’ strategy was “bearing fruit” as it reported a 17.6% jump in profits in half-year results. The retailer says it has invested in its stores and online as it looks to improve the customer experience and attract premium brands to its business. But it says that the high street will not survive Covid-19 unless the government reforms business rates. 

Frasers says that its strategy of investing in department stores, single brand stores and the brands that sell within them has strengthened its relationships with third-party brands including Nike in branches of Sports Direct, Burberry at Flannels and Hugo Boss for House of Fraser. In recent years it has bought House of Fraser and attempted to buy the Debenhams department store as well. It is currently in discussions about buying Debenhams out of administration. In its latest half-year it has opened a new 25,000 sq ft multibrand shop in Cascades Shopping Centre, Portsmouth and is  investing in its Sports Direct shop on Oxford Street, London. “We will continue to build these partnerships to develop a successful business between us in the coming years,” Frasers Group chief executive Mike Ashley said in full-year results today. The group is now considering a further investment specifically in digital luxury elevation for the Flannels business, and will make an announcement in full-year results next summer. Prior to Arcadia Group’s administration it said it would be open to buying some of its brands although as yet there is no news on this. 

The retailer has “invested in businesses we feel are an important strategic match to the group’s long-term plans” – and now has a stake of 37% in Mulberry, which it describes as “a truly iconic  luxury British brand that we strongly believe will find its rightful home in our Flannels business”, and it also now owns 10% of Hugo Boss, as well as existing investments in French Connection and Studio Retail. 

Its premium luxury division was the only part of its business to show a rise in sales during its latest financial year – by 4.8% to £320.4m. That comes, says Frasers Group, as a result of new Flannels stores, increased online sales, and the acquisitions of Jack Wills and  But once those acquisitions are excluded, revenue in the division is 0.7% down.

Frasers Group today reported sales of £1.9bn in the 26 weeks to October 25. That’s 7.4% down on the same time last year. Aside from its premium luxury division, full-year sales fell in its UK sports retail (-9.8%), European (-3.7%), rest of the world (-16.3%) and wholesale and licensing (-21.5%) divisions. Pre-tax profits came in at £106.1m, 17.6% up on the previous year, as a result of new Flannels stores, strong online trade and a strong performance in stores once they reopened from Covid lockdowns. It reported earnings before interest, tax, and one-off costs of £357.1m and says that is likely to rise by between 20% and 30% in its full financial year. 


The retail group saw its stores in the UK and Europe closed at different times during the half-year and beyond. It says that its online service “remains resilient and helps to mitigate to a certain extent the negative effect caused by these bricks and mortar closures”. 

Ashley adds: “I do not wish to comment on the wider Covid-19 picture but from a general retail perspective it is impossible to ignore the lack of clarity of guidance when it finally arrives. Fortunately the Frasers Group is a strong business built on solid foundations. We can weather most of the storms faced this calendar year, however much of the UK high street, which was already suffering before Covid-19, won’t survive unless the Government addresses the out-of-date business rates regime which is due to return come April 2021.”

Commenting on today’s results, Alex Hardy, retail analyst at data and analytics company GlobalData, says: ‘‘Significant investment in its digital business has helped to mitigate the effects of the Covid-19 pandemic for the Frasers Group, with total revenue declining 7.4% to £1,893m in H1 FY2020/21 despite stores being closed for over a quarter of the period. Recent acquisitions including Jack Wills and were major contributors to this however, with like-for-like revenue witnessing a fall of 11.2%. Nonetheless, these results, combined with English stores reopening in December, has enabled the group to raise the bottom end of its full-year guidance for underlying EBITDA from 10% to 20%, with the upper end remaining at 30%, sending its share price climbing 10% in early morning trading.”

House of Fraser and Debenhams are both Top50 retailers in RXUK Top500 research, while Sports Direct is Top150, Jack Wills is Top250 and Flannels is Top350. 

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