Ecommerce fuels House of Fraser sales growth

House of Fraser reported its first profit in ten years at £1.3 million, with ecommerce understood to be the driver behind sales growth of 4.5 per cent.

The department store chain chalked up a 4.2pc increase in like-for-like sales to £1.3 billion after a 27 per cent surge in online sales. Ecommerce now represents almost 19 per cent House of Fraser’s total turnover, helping to offset flat growth in its bricks and mortar shops.

While online sales grew by 26.8 per cent to represent 18.9 per cent of total sales in the 52 weeks to January 30 2016, store sales were almost flat at 0.1 per cent up on last year on a like-for-like basis, which strips out the effect of store openings and closures. Overall sales hit a gross transaction value of £1.3bn, 4.2 per cent ahead on a like-for-like basis.

The results follow a year of investment in IT and ecommerce following a refinancing and £125 million of investment from Chinese owner Sanpower .

Improvements to the group website have enabled the launch of a new Australian website this month, while the online Recognition loyalty scheme has been further developed. In fulfillment, improved Buy & Collect areas have been put in place in 17 stores, while delivery upgrades include the introduction of next-day before noon and afternoon.

The group also refurbished six stores over the course of the year, as well as signing up as anchor tenant at the Rushden Lakes shopping centre development in Northamptonshire. It now plans to open its first store in China later this year.

Chief executive Nigel Oddy said its first profit in 10 years was driven by “continued progress across both our online and bricks and mortar stores, despite the volatile trading environment in the final quarter of fiscal year 2016.”

He added, “We have continued to invest in our business throughout the year, strengthening our multichannel proposition and enhancing our store environments with six extensive store refurbishments completed in the year. This investment will continue in fiscal year 2017, when we plan to refurbish further stores and continue to develop our IT and ecommerce capabilities.”