House of Fraser has reported a rise in its half-year sales and profits on the back of strong growth across both its stores and online.

  • Online sales increase 30.8%
  • Web accounts for 17.5% of sales
  • Gross profits rise £11.3m to £204.7m

The department store said adjusted EBITDA increased 7% to £9.2m in the 26 weeks to August 1. Gross profit was up £11.3m to £204.7m.

Its total gross transactional value increased to £574.2m on total like-for-like sales growth of 6.5%, excluding VAT.

Online performed well with sales surging 30.8%; the web now accounts for 17.5% of sales.

Like-for-like sales from stores increased 2% during the period.

The retailer said its house brands, branded and concessions increased 2.1%, 7% and 6.7% respectively. During the period, the retailer introduced more brands and concession partners such as Victoria Beckham Denim. It highlighted menswear as a particularly strong category, while home sales rose 7.8%.

During the period, House of Fraser refurbished its Huddersfield and Lincoln stores. It said improvements to Metro Centre, City, Bluewater and Leeds are under way and due to be completed ahead of peak Christmas trading.

Overseas, the department store opened a second international franchise store in Abu Dhabi in June and aims to open its first store in China in 2016.

Chief executive Nigel Oddy said the department store group is exploring which brands it would stock in the China store. “We will be very much targeting to be an essentially Britishness department store with House of Fraser heritage but also there will be requirements for local brands.”

Current trading

The retailer said trade had been challenging in August but there noted an improvement in September. “August was pretty tough, with consumers spending on entertainment and holidays rather than retail but we’ve had a good few weeks in September,” said Oddy. “We’re pleased with [current] trade. We had a tough August but we’ve bounced back.”

While Oddy was guarded over the retailer’s plans for Black Friday, he said it would be looking at running promotional activity over the whole weekend. “We’re hoping it will be bigger and better,” said Oddy.

House of Fraser said that cumulative like-for-like sales were up 5.1% for the first 33 weeks of the financial year and the group was optimistic for a successful autumn/winter season.

Oddy said: “We are pleased with the continued sales and profit growth in the first half of this year. Both stores and online have delivered positive sales and margin growth, building on the performance we have seen in both these channels in recent years, demonstrating the truly multichannel nature of our business.

“We have continued to invest in our UK business to remain at the forefront of retail innovation by developing our multichannel offering, enhancing our store portfolio, growing House Brands and introducing exciting premium brands. This focus on our key strategic pillars has also been reflected in our current trading.

“We continue to make progress on our international expansion plans and remain excited by our future growth opportunities both in the UK and abroad.”

On the living wage, Oddy said the retailer was “currently reviewing the implications”. He added: “We are assessing all options for mitigating the costs. assessing all options for mitigating the costs. We’re looking at our business plans through the next year.”