House of Fraser suffers sales fall

House of Fraser today said a reluctance among householders to spend on big-ticket items had left recent sales in negative territory.

The department store group said the continued slow sales at its home division contributed to same-store transaction value falling 3.2% in the 19 weeks to June 11.

However, it sounded a more upbeat note as it told its annual meeting that a series of new store openings would strengthen the business and had boosted total sales.

The company, which has around 50 UK outlets, said its home division had seen total transaction value fall 1.4% in the period.

In contrast, fashion performed well and showed a rise of 3.6%, leaving total transaction value across the business 2.5% higher.

Chief executive John Coleman said: “Everyone knows the big ticket market in the UK is pretty bad at the moment with the slowdown in the housing market. People are spending less redoing their homes.”

However, he said this would “not last forever”, saying things would turn around as they did during the last slowdown.

Margins had worsened after it discounted goods to reduce stock levels, although the group was pleased that it now held 4% less stock than last year despite the increase in selling space.

House of Fraser owns the Rackhams and Army & Navy chains and has stores at locations including Nottingham, Reading, Edinburgh and Birmingham.

It recently opened new stores in Dublin, Maidstone, and Croydon – its largest to date – and acquired Scotland’s historic Jenners department stores for £14.1m (€21.2m).

The company said it was pleased with progress on the integration of Jenners and expected savings in the current financial year would be greater than previously thought.

Jenners includes a flagship store on Edinburgh’s Princes Street store as well as outlets at Glasgow and Edinburgh airports and one at Loch Lomond Shores.

New stores are to be opened in Norwich, Belfast, High Wycombe and Chester, while its Bristol outlet is to move to a new site.

House of Fraser said in March that annual profits before property gains had risen to £28.2m (€27.4m) from £27m (€40.7m).