House of Fraser looks to the margins for growth
New stores expected to deliver sales boost
House of Fraser is focusing on margin improvements to deliver growth as the UK department store sector continues to find sales hard to come by.
HOF, specialising in designer brands, told shareholders in a statement coinciding with the group’s annual meeting that in the first 19 weeks of the current financial year, like-for-like gross transaction value was up 0.4 per cent year-on-year. That matches City forecasts of broadly flat sales.
With the gross margin rate up on last year by over 70 points, HOF said the combined figures add up to a like-for-like gross margin improvement of more than 2.5 per cent.
Chief executive John Coleman said: “We are pleased with the current trading performance with continued growth in both sales and gross margin.
“The work undertaken to manage costs has continued successfully. This activity, combined with the improvement in the like-for-like gross margin, means that the company is confident of a satisfactory trading outcome for the 26 week period ending July 31.
“The company has a strong new store opening programme and is on schedule to open its Croydon store in September with a further three new stores set to open in 2005.
“Given the continued improvement in trading and the expected benefits from the new store openings, the company remains positive on its future prospects.”
