House of Fraser forecasts flat profits
Department store group facing tough market
House of Fraser is forecasting annual profit to be level with last year after sales fell in a difficult retail environment.
The department store group said like-for-like gross transaction value (GTV) is 1.3 per cent down for the half year to date, to Monday January 3. Total GTV is 2.3 per cent down, reflecting store closures in Bromley, Paisley and Inverness, and disruption at Manchester and Maidstone.
The dip has been partially offset by the new HoF store in Croydon. For the year to date, like-for-like GTV is 0.7 per cent down, with total GTV down by 2 per cent.
HoF said gross margin is marginally ahead of last year, with tight controls meaning total stocks are 3 per cent lower than last year, with fashion terminal stock 20 per cent lower.
The group has previously announced expected benefits to the bottom line from a new storecard deal with Barclaycard, as well as the proceeds of sale and leaseback property transactions.
Chief executive John Coleman, said: “We believe that we have delivered a creditable performance in a difficult and challenging retail environment. Tight control of stocks and lower levels of discounting, combined with greater flexibility in our cost base, have offset the financial impact of the lower than anticipated revenues.
“We enter 2005 in a significantly stronger financial position following the recently announced property and storecard transactions. These, together with the opening of three new stores later this year, enable the group to look to 2005 with confidence.”
