Sales dip 1.5% but House of Fraser proves itself 'robust'

Published on Thursday 8 January 2009 20:26

HOUSE of Fraser, the department store chain founded in Glasgow in the 19th century and owner of Edinburgh-based Jenners, has proved relatively resilient in a tough Christmas trading period – reporting a 4.5 per cent rise in total sales.

Like-for-like sales, taking into account only shops that have been open for more than a year, slipped by 1.5 per cent over the five weeks to 3 January – starkly better than Marks & Spencer's and Next's sales, which were both about 7 per cent down.

And online sales grew by 150 per cent compared with the Christmas period in 2007, as the group gained 1.7 million new users.

The update will come as welcome news for Scots entrepreneur Sir Tom Hunter, who is part of a consortium that owns House of Fraser, in partnership with a number of businesses including Icelandic retail investor Baugur.

Hunter has in recent weeks suffered setbacks at his empire of businesses as high street fashion chain USC slipped into administration with the loss of 300 jobs, while he also wrote off 35 million to reflect the fall in value of his stake in housebuilder Crest Nicholson.

Don McCarthy, chairman of House of Fraser, said: "The retail sector has experienced one of its toughest years to date. However, our performance over the Christmas period was positive and we are satisfied with the robustness of our business."

TV and audio sales racked up record gains in the period following 22 December, the firm said, while hampers and food gifts were up 20 per cent on the previous festive period.

McCarthy added: "The outlook for 2009 remains challenging and we will continue to focus on managing our business accordingly so that our positive performance can continue throughout the new year.

"However, we do anticipate changes to our brand portfolio, as underperforming brands will leave our business and brands that are performing well will grow alongside new brands introduced during the year."

The privately held company said it would be in a strong financial position at the end of its financial year in March.

It said it had repaid its banking facilities ahead of schedule, making a repayment of 34.5m last week – taking the total amount of debt repaid or cancelled under its new ownership to more than 140m. House of Fraser was bought by the Baugur-led consortium in a 351m deal in 2006.

The company began in the 19th century when Hugh Fraser and James Arthur set up a small drapery shop on the corner of Argyle Street and Buchanan Street in Glasgow. Fraser's grandson, also called Hugh, expanded the business dramatically in the early 1900s and it was listed on the stock exchange in 1948.

House of Fraser did not give information about progress at Jenners or its other Scottish stores.