HOUSE OF FRASER CHRISTMAS TRADING UPDATE


House of Fraser, the UK and Ireland’s premium department store acquired by Highland Group Holdings in November 2006, today provides an update on trading for the Christmas period. Despite the difficult retail climate, sales for the 8 weeks to 2nd January 2010 were up 7.1% on a like-for-like basis.

This included the company’s biggest ever Christmas week, with sales on Boxing Day up 27% on a like-for like-basis. Online sales performed strongly, increasing 91% on last year for the 8 week period. Gross profit was also up as a result of our stronger product and pricing offer.

Sales of brands owned by House of Fraser (‘House brands’) over this period grew by 33% - these include Linea, Kenneth Cole, New & Lingwood, Howick and Episode. The company also experienced a strong performance across its entire brand offer, with women’s fashion accessories up 20% and menswear up 12% on a like-for-like basis.

Highlights include:
  • Total Sales up 7.1% on a like-for-like basis
  • Online sales up 91% with a 50% increase in brands offered - cosmetics, knitwear, and boots being the most in demand items
  • “House Brand” growth up 33% with particular strong performance from Linea + 20%, Howick +41% and House brands handbags +480%
  • Concession partners sales up 12.7%
  • Strong performance from new stores with like-for-like sales up 10.1%
  • Stock management systems continue to improve – total stocks down 14%
  • Acquisition of iconic fashion brand Biba, and introduction of other exciting brands such as Label Lab and Pied-a-Terre in 2010


John King, Chief Executive Officer of House of Fraser said:
“We are particularly pleased with our performance over this key trading period, which has continued a trend of improved performance within the business over the year. Our results are a demonstration that our customers continue to respond positively to the changes we have been making throughout the business. The growth of our online business has been encouraging, as has the performance of our many House brands. It was pleasing that we had our biggest ever Christmas week and Boxing Day, with some of our stores, such as Oxford Street, experiencing their strongest ever performance.

I would like to thank the management team, our staff and retail partners for their amazing efforts over both the festive period and the year as a whole.”

Don McCarthy, Chairman of House of Fraser added
“Our Christmas trading performance demonstrates the on-going progress in rebuilding the House of Fraser business, and the outstanding work of the management and staff.

The general outlook for retailing will be tough until the overall national economic position improves and we remain cautious for 2010. However, we are confident the investments we have made across our portfolio since the take private will mean our customers have many reasons to visit our stores over the coming year. We believe product offering and innovation will be key, and to this end our plans to introduce and extend our House brands offer with the launch of exciting new brands will give our stores a freshness and vibrancy. We will further differentiate ourselves from our competitors through our store environment and our exclusive brand offering.

We are well ahead of our debt payment schedule as we will be £130 million ahead of plan by the end of this month. We will continue our debt reduction programme in 2010 and the overall financial position of the business is very strong and well positioned for the challenges ahead.

The company will respond quickly to market developments while at the same time delivering on our strategy to introduce new and exciting premium brands at competitive prices.”

House of Fraser Contact
Kreab Gavin Anderson
cgros@kreabgavinanderson.com
+44 (0) 20 7074 1800