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ScS says record ecommerce growth offsets 9.4% drop in sales at its House of Fraser concessions

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ScS today said that growth in its core business, including record online sales, had offset falling sales in its concessions within House of Fraser stores in its latest financial year.

Online sales at the sofa-to-carpet specialist grew by 22.6% during the year, helping keep full-year sales in positive territory despite a near 9.4% drop in sales at its 27 House of Fraser concessions. 

Sales via ScS concessions in the department store chain, which was bought out of administration by Sports Direct in August, represented 7.1% of its sales in the year to July 28, ScS said in today’s full-year report. Through the year, those sales were affected by uncertainty as to whether the department store would survive, it said, and they fell by 9.4% to £24.8m. House of Fraser went into administration after the ScS financial year ended. Trade in the concessions “remains challenging,” it said today, adding: “We are working with the new owners to address this as a priority.”

It said its House of Fraser concessions, originally opened in order to put its goods before a demographic that prefers to shop on high streets or in department stores, were all still trading. “We remain in discussions with the new owners in an attempt to agree new terms of trade, mindful of the 124 employees who work in these concessions, but also of the need to protect and enhance shareholder value,” it said.

The update came as the sofa-to-carpets retailer, ranked Top500 in IRUK Top500 research, reported revenues of £337.3m in the year to July 28, 0.8% ahead of the previous year. Pre-tax profits of £13.2m were 10% ahead of the £12m it reported last time. Online sales of £13.8m were 22.6% ahead of £11.3m last time.

The retailer trades online and from 101 stores as well as in the 27 House of Fraser concessions.

ScS chief executive David Knight said 2018 had been a strong year in challenging times. “Despite a prolonged period of economic uncertainty and challenging trading conditions, we have continued to grow the business. I believe this is due to our continued focus on what we do best – ensuring that we offer an excellent customer experience with outstanding value, quality and choice. The downturn in sales in our House of Fraser concessions has been more than offset by growth in our core ScS business. This has been aided by record results from our online channel, which has seen a 22.6% increase in gross sales.”

Focusing online

The retailer has reviewed its strategy for the next three years and says the emphasis will be on delivering an “exceptional” customer experience while also creating a “market-leading” website and digital awareness as it looks to drive both sales and profitability, growing its flooring category as well as sales of sofas. It points to its five-star rating over more than 100,000 Trustpilot reviews, says it will be reviewing the customer journey, from the point that customers start their research online or in the store, to the point of delivery. “The aim is to identify where we can further enhance the experience,” it said in today’s statement. “This will include the use of mobile technology and the continued incentivisation of our teams to provide an excellent customer experience.”

The retailer also believes that developing and managing its supply chain to enable it to respond to emerging trends and focus on product quality and service will prove a “key competitive advantage in the future.”

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