The troubled House of Fraser chain has reported its first profit in a decade, driven by ecommerce sales.
While sales at the chain’s bricks and mortar locations grew a barely perceptible 0.1% over the past year, online sales have leaped up by over a quarter (26.8%) and now represent 18.9% of total sales.
This follows heavy investment in the chain’s online presence by the firm’s Chinese owner, Sanpower, which took over House of Fraser in 2014. Their ecommerce plan includes launching a new Australian website, improving Buy & Collect facilities within their stores, and boosting their online loyalty scheme, Recognition.
Chief Executive Nigel Oddy said that the chain going into profit for the first time in ten years was the result of “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: “This investment will continue in fiscal year 2017, when we plan to refurbish further stores and continue to develop our IT and ecommerce capabilities.”
“Looking ahead, whilst mindful of ongoing uncertainty around the EU referendum and the challenging market conditions experienced across the retail industry since the beginning of 2016, we remain cautiously optimistic and believe we are well positioned to deliver further growth in the year ahead”, Mr Oddy continued.
House of Fraser is actively seeking out younger customers and is currently in talks with Sports Direct, which has an 11% stake in the firm, to investigate possibilities of partnering with their subsidiary Lillywhites to help them branch out into the fashionable sportswear and “athleisure” sectors. Their ebusiness expansion appears to be a part of this strategy, since millennials are more likely to do their shopping online than older shoppers.