House of Fraser reports rise in profits

House of Fraser reports rise in profits

	Published : Sun, 26 Mar 2006 13:00 By : Amy Watts Print this Story

LONDON: Department store chain House of Fraser reported Friday its underlying annual profit for the period ended 28 January rose 4.6 per cent to 27.3 million pounds.

The company, which owns the centrepiece store of Norwich's Chapelfield shopping centre, said its like-for-like sales fell 3.9 per cent but the decline slowed to 1.3 per cent in the seven weeks of the current fiscal. However, total sales, taking into consideration, the company's acquisition of the Jenners and Beatties chains for 87.3 million pounds, went up 11.2 per cent, the company said.

Chief executive John Coleman said the company had expected a tough time in the first half of 2006, but the first seven weeks have been ahead of expectations.

Jenners and Beatties contributed around 5 million pounds to the company's profits and without this contribution, the profits would have actually dropped. Coleman admitted profits would have gone backwards without Jenners and Beatties.

The company had been an acquisition target with speculation that equity group Apax Partners had made an offer of 300 million pounds. The company said on 17 March that the offer talks have ended without assigning any reason.

The company said returns from its four new stores in Croydon, Dublin, Maidstone and Norwich had missed internal targets. It had introduced some cheaper ranges at its stores in place of some its more expensive brands to persuade shoppers to buy and this strategy worked during the holiday and Christmas periods with like-for-like sales rising.

The 60-store company said it plans to introduce toys, stationery and haberdashery units in its stores and continue to open more stores and sell off non-profitable ones.

The company is paying a final dividend at 3.8 pence-a-share, making the total at 5.5 pence.

House of Fraser shares closed at 114.75 pence Thursday valuing it at 271 million pounds.