House of Fraser: Profit doubles at Mike Ashley’s department store chain amid store closures
House of Fraser more than doubled its pre-tax profit despite a fall in revenue after closing stores across the country, it has been revealed.
The performance of the department store chain, which is owned by Mike Ashley’s Frasers Group, has been outlined in accounts filed with Companies House more than seven months after the deadline.
The results for the 12 months to 30 April 2023 show House of Fraser posted a pre-tax profit of £40.5m for the year, up from £20.6m in the prior period.
However, its revenue was cut from £363.5m to £348.8m after closing a number of stores.
While the overall financial performance of its parent company is reported on a quarterly basis to the London Stock Exchange, detailed figures for House of Fraser are not outlined.
House of Fraser started the financial year with 39 stores but closed ten during the period, while also opening two.
As a result of its late filing of its accounts, Companies House issued House of Fraser with a compulsory strike-off notice in July this year but the action was discontinued a day later.
House of Fraser is now expected to submit its accounts for the year to 30 April, 2024, by the end of January 2025.
House of Fraser shows ‘strong performance’
A statement signed off by the board said: “The company has shown a strong performance despite the reduced number of retail stores generating lower levels of revenue, cost tightening and efficiencies has resulted in greater levels of profitability.”
House of Fraser added: “During FY23, we have continued to see the progress of the elevation strategy with additional new flagship stores opening.
“The elevation of our multi-channel retail proposition remains a key strategic objective.
“To this end, we are improving the customer experience at every step of the journey.
“We aim to deliver an unrivalled range, availability and quality of products – both third party brands and group branded products.
“The elevation strategy continues to enhance and improve our stores and all our digital operations, our product offering and our marketing channels.
“This is vital to strengthen our relationships with our key party brand partners, to deliver benefits for consumers and to drive the company’s long-term profitability.”
House of Fraser generated £300.4m in revenue from its stores in the year, down from £308.8m, while its royalty income also fell from £54.7m to £48.4m.
During the year the average number of people employed by the company also decreased from 2,915 to 2,567.
In May, City PM reported that Jack Wills, another Frasers Group-owned brand whose detailed performance is not included in London Stock Exchange filings, posted a stready profit despite a raft of store closures and job cuts resulted in its revenue falling below £30m.
The business, which was acquired by the owner of Sports Direct and House of Fraser in 2019 out of administration, posed a pre-tax profit of £10.1m for the year to April 30, 2023, compared to £10.6m in the prior 12 months.
Its revenue also fell from £34.3m to £28.4m in the period.
During the year, the number of Jack Wills stores in the UK fell from 52 to 33 while the number of people it employed was also cut from 304 to 233.
For the year to 28 April, 2024, Frasers Group reported a revenue of £5.53bn, down slightly from the £5.58bn it achieved in the prior year.
Its reported pre-tax profit from continuing operations was cut by more than 20 per cent from £638m to £507m.