House of Fraser announces 32% online sales rise in a year when the website was its most profitable store

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House of Fraser today reported a 32% leap in online sales in its latest financial year – and said the ecommerce business was now both its largest and most profitable store.

The department store business signalled major investment in multichannel over the next 12 months, including international ecommerce expansion into markets including Australia and China.

Some 15.4% of all its sales were made online in the latest year, it said.

“Our online business has performed exceptionally strongly and has substantial future potential,” said chief executive Nigel Oddy. “The web store has been the largest single store in terms of sales for the last three years and, for the first time this year, it has become the most profitable store in the group.”

The update came as the company reported record gross transaction value of £1.3bn in the year to January 31, with like-for-like sales – which strip out the effect of store openings and closures – up by 5.8% on the previous year. Store only sales rose by 2.2%, on a like-for-like basis.

Gross profit also broke records, coming in at £460.2m, £29.6m ahead of the previous year. Adjusted earnings before interest, tax and asset writedowns (EBITDA) hit £64.4m, 7% up on last time.

House of Fraser said it planned to boost multichannel investment in the year ahead, and would also start to expand its ecommerce business overseas. Customers can currently order from the UK website for delivery to more than 120 countries, but today the company said it would launch online trading in China and other international markets, starting with Australia. The initiative will see new dedicated local language websites, offering local currency payments, launched. House of Fraser will also start trading in China via the TMall online giant.

The launches follow a strategy of bricks and mortar overseas expansion. The company has one franchise store in Abu Dhabi, and, following its acquisition by Chinese company Nanjing Cenbest, it is now on track to open three stores in the Chinese cities of Nanjing, Chonqing, and Xuzhou.

Oddy said record sales and profit had come through strategic successes including ecommerce, multichannel and a focus on house brands, the latter of which saw sales growth of 10% during the year.

“We have strengthened our relationships with our brand partners and continued our collaborative approach to improving store environments which has helped us to deliver sales growth from our bricks & mortar stores,” he said.

He added: “We are confident that the group’s business model, with our premium brand positioning and strong multichannel operation, will ensure that House of Fraser continues to grow and develop for the foreseeable future. We are very excited by the future as we embark on the next phase of growth both in the UK and internationally.”

Among a raft of promotions announced today was that of Andy Harding , from the role of executive director multichannel to chief customer officer.

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Image courtesy of Made.com
Strategy and Innovation
4 Oct 2022

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