House of Fraser sales recover

By THIS IS MONEY
Updated: 18:00 EST, 27 March 2000

Department stores group House of Fraser has enjoyed a strong recovery in sales in the first eight weeks of its financial year, the group said today.

The group, which owns the Dickens & Jones, DH Evans and Army & Navy stores, said new product lines and improved supply systems had helped like-for-like sales rise 5.7% in the eight weeks since January 29.

The sales recovery began in the second half of last year and was in sharp contrast to the slide suffered at the group in the first half of 1999 when like-for-like sales fell by 2.4%.

John Coleman, chief executive at House of Fraser, said: 'This is a strong performance in the context of the general retailing climate. We have achieved improvements in sales levels over the year and have continued to grow sales and market shares into our new financial year.'

The trading figures came as the group released full year results for the year to January 29 which showed a steady recovery in the company's fortunes.

Including a one-off gain of £2.6m the group saw profits before tax edge up to £20.4m from £17.8m.

David Adams said the company had held its own in the difficult retail climate because of its improved supply chain system.

The group opened a national distribution centre in Milton Keynes in May as part of an effort to streamline supply to its stores. 'We used to allocate 80% of our stock to stores in advance and we would run out of stock. Now we replenish as we sell,' said Mr Adams.

The improved efficiency of its supply system also reduced the amount of price markdown needed to clear unsold stock, the company said. The supply centre has also allowed the group to import more of its own clothing to help establish a range of own label fashion ranges.

Two new own label ranges 'House of Fraser' in womenswear and 'The Collection' for Men were launched in August adding to the group's existing labels such as Linea.

Mr Adams said the own label ranges offered better margins and while currently accounting for around 25% of fashion sales they could rise to between 35% and 40%.

Turnover at House of Fraser in the year to January 29 was £815.7m, up from £797.7m.

Total dividends of 5.5p a share are being held level with the previous year.