House of Fraser sales crash 60 % in lead-up to Christmas

By guest author Elias Jahshan from Retail Gazette

  • House of Fraser Christmas sales reportedly plunge 60%
  • First Christmas season under new owners Sports Direct
  • Sports Direct bought House of Fraser out of administration for GBP 90 million in August 2018

House of Fraser reportedly had a poor Christmas trading season last year, with sales during the crucial trading season nosediving.

caption courtesy Retail Gazette

According to figures by Kantar Worldpanel, as reported by The Sunday Telegraph, the department store recorded a 60 per cent year-on-year crash in sales in the 12 weeks leading up to December 18.

It was House of Fraser’s first Christmas under the ownership of Sports Direct, the retail group that operates the eponymous retail chain along with USC, Flannels and Evans Cycles and is majority-owned by retail tycoon Mike Ashley.

The Retail Gazette has contacted Sports Direct for further comment.

House of Fraser’s reportedly dismal Christmas results comes amid reports that Ashley has been in talks with HMV’s suppliers in hopes of buying the music and entertainment retailer out of administration.

It also comes after Sports Direct’s half-year results to October 28 included a 26.8 per cent year-on-year drop in underlying pre-tax profits to £64.4 million amidst a 4.5 per cent rise in total revenue.

The results were impacted by Sports Direct’s takeover of House of Fraser in August, when the firm spent GBP 90 million to buy the department store chain out of administration.

At the time, Ashley vowed to save 47 out of House of Fraser’s 59 stores.

However, The Telegraph said Ashley spent GBP 31.5 million within two months after taking over House of Fraser, as he had to advance cash to suppliers who had pulled their stock amid fears the retailer was about to collapse.

In September, Sports Direct agreed terms on 20 stores and has been operating the House of Fraser estate on short term licences which allow it to hand over the keys with just two months’ notice.

In October, House of Fraser said that stores in Exeter and Shrewsbury were due to close in early 2019, leading to hundreds of job losses.

Shortly after, Ashley said he would close down all four of House of Fraser’s Intu shopping centre sites in Gateshead, Norwich, Nottingham and Lakeside after failing to reach an agreement with “greedy landlords”.

House of Frasers in Cirencester, Edinburgh and Chichester also also due to shut down after Sports Direct failed to reach an agreement with their respective landlords.

Meanwhile, iconic House of Fraser stores in Glasgow and Manchester have been rescued, along with the Swindon branch.

To date, around 23 House of Fraser stores have been saved from closure, saving an estimated 3600 jobs.

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www.houseoffraser.co.uk

www.sportsdirectplc.com