Online becomes House of Fraser's most profitable channel for first time

House of Fraser has attributed record sales in 2014 to the continued growth of online as its web store became its most profitable retail channel for the first time.

Total sales at the department store were up 5.8 per cent on a like-for-like basis to £1.3 billion for the 53 weeks to 31 January 2015. This was driven by a 32 per cent increase in its online business, now representing 15.4 per cent of sales. Sales in bricks and mortar stores were up 2.2 per cent.

Chief executive Nigel Oddy, who replaced Justin King earlier this year, said: “Our online business has performed exceptionally strongly and has substantial future potential. The web store has been the largest single store in terms of sales for the last three years and, for the first time this year, it has become the most profitable store in the Group”

This looks set to continue following the recent appointment of Uday Kotla to chief technology officer.

Meanwhile, the introduction of luxury brands including Polo Ralph Lauren and Michael Kors to its offering as well as the extension of in-house brands such as Linea and Biba, further helped the retailer achieve 10 per cent growth across all categories.

The past year saw the brand try to cement its potitioning as a premium retailer and destination for fashionable gifting. Last December, it rolled out its first brand TV campaign in over a decade and followed that up with a lucrative deal to sponsor the British Academy Television Awards.

“We have strengthened our relationships with our brand partners and continued our collaborative approach to improving store environments which has helped us to deliver sales growth from our bricks and mortar stores,” Oddy continued.

Overall House of Fraser ended the year with a record gross profit of £460.2m, up £29.6m year-on-year.

“We are confident that the Group's business model, with our premium brand positioning and strong multichannel operation will ensure that House of Fraser continues to grow and develop for the foreseeable future. We are very excited by the future as we embark on the next phase of growth both in the UK and internationally.”

Moving forward, the brand has eyed Australia and China as key territories following its acquisition by Nanjing Cenbest. It plans to open three large store formats over the coming year in major Chinese cities: Nanjing, Chongqing and Xuzhou. It will also start to trade online in both China and Australia.

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