House of Fraser to open in China as profit grows
- FY adjusted EBITDA grows 7% to GBP64.4m
- Record like-for-like sales up 5.8%
- Group to open first store in China in 2016
House of Fraser will open its first store in China next year
UK department store group House of Fraser has revealed it will open its first store in China next year after posting record annual sales and strong profit growth.
The company, which was last year sold to Nanjing Cenbest, the Shanghai-listed retail arm of Chinese conglomerate Sanpower Group, said adjusted EBITDA reached GBP64.4m for the 53 weeks to 31 January, up 7% from GBP60.2m in the same period of the prior year.
Like-for-like sales increased 5.8%. Online sales jumped 32%, representing 15.4% of total sales, while sales in bricks and mortar stores were up 2.2% on a like-for-like basis.
"We are pleased to report another year of record sales and gross profit and a further improvement in the Group’s earnings," said CEO Nigel Oddy.
Oddy attributed the performance to successes in each of its key strategic pillars: to enhance our premium department store positioning; drive growth in multichannel operations and house brands; and invest in our stores, both in the UK and internationally.
House of Fraser plans to open stores across China, starting with three large stores in Nanjing, Chongqing and Xuzhou. It will also start trading online in the country as well as other international markets, beginning with Australia.
It will also open its second franchise store in Abu Dhabi shortly, and has plans to open further stores in the Middle East. Within the UK, the retailer will significantly increase the level of investment in its multichannel proposition, and the refurbishment of its store portfolio, with six store upgrades planned in the coming year.
Strong momentum seen in 2014 has continued into this year, the group said, with sales for the first 11 weeks to 18 April up 6.5%, and a "further improvement" in the gross margin rate.
"We are confident that the Group's business model, with our premium brand positioning and strong multichannel operation will ensure that House of Fraser continues to grow and develop for the foreseeable future," Oddy added.
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