Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

House of Fraser owner could close more big shops as department store model ‘broken’

by July 28, 2023
July 28, 2023
House of Fraser owner could close more big shops as department store model ‘broken’

The owner of House of Fraser has said it could close more stores, after shutting eight in the past year and declaring “the department store globally is broken”.

Michael Murray, the chief executive of Mike Ashley’s retail empire Frasers, which also owns Sports Direct, the designer street fashion chain Flannels and a plethora of brands from Jack Wills to Evans Cycles, said its department store portfolio was “continually under review” and some outlets were “still too big”. “We have to find solutions for the excess space,” he said.

House of Fraser has already almost halved in size from 59 stores to 31 since it was bought out of administration by Ashley’s retail empire in August 2018. Murray said that historically stores would have been 150,000 sq ft or larger, which was now “too big” and meant that in the past they “didn’t have the investment” they needed. The group now wants stores of about 50,000 sq ft or smaller.

House of Fraser’s latest closures follow a trend of decline for traditional department stores, with the UK’s Debenhams chain now online-only after collapsing into administration in 2019, while Beales is reduced to just a handful of stores after going bust in 2020. John Lewis has shut 16 stores since 2020, leaving it with just 34, while Fenwick is to shut its flagship London shop on Bond Street next year after 130 years of trade.

Murray’s comments came as Frasers reported that pre-tax profits for the group almost doubled to £660m after sales rose 16% to £5.6bn in the year to 30 April.

Sales at the group’s premium division, which includes Flannels and House of Fraser, rose 5.7%, before acquisitions, but the division sank to a loss of £100,000, from a £10.5m profit a year before, after losing business rates relief and taking a £19.8m hit from store closures.

Sales at the core Sports Direct chain were virtually flat year on year, excluding acquisitions, but profits more than doubled to £447m as the group said a better relationship with the key brand Nike and other labels had helped it improve profit margins while it made additional profits on property disposals.

Frasers’ sales were helped by a slew of acquisitions, including the online specialist Studio Retail and several brands from JD Sports. Murray indicated there would be more to come.

He said the group would continue to build stakes in listed companies as that was important in moving relationships forward. “Everyone can talk about trying to drive a strategic relationship but if someone doesn’t put their money where their mouth is and take the first step then [nothing changes]. When you own 10% to 20% everyone’s focused to make things happen. You are having conversations,” he said.

While he would not comment on Frasers’ plans for specific companies, Murray added: “There’s going to be opportunities and we are well placed to capitalise on them. We have a strong industry leading platform for helping these businesses and taking benefits for our business.”

The company said it expected to make up to £550m in underlying profit in the year ahead despite a tough consumer environment as it would be “staying focused on cost inflation”.

That would be a step up from the £478m of underlying profit in the year to April, which came after excluding one-off benefits including a £55.2m gain on the acquisition of some brands from JD Sports and £17m related to the sale of a stake in Kangol.

On Thursday, Frasers said it had increased its stake in the online retailer Asos by another two percentage points to 15%. This week it has also upped its stake in the online fashion site Boohoo from 5% to 6.7% and N Brown from 18% to 19%.

Read more:
House of Fraser owner could close more big shops as department store model ‘broken’

0
FacebookTwitterGoogle +Pinterest
previous post
London ULEZ expansion legal, High Court rules
next post
Britain loses 6,000 retail outlets in five years as shops close

You may also like

UK Business Confidence slides and hiring falls, says...

August 7, 2023

Britain’s high streets saw 35 shop closures a...

March 20, 2025

Half of UK SMEs have had loan application...

September 5, 2022

Supply Chain Visibility Explained: Tools, Benefits, and Best...

January 27, 2025

Jeremy Hunt Faces Tight Battle for Seat in...

June 12, 2024

New survey reveals over half of SMEs planning...

April 23, 2024

New NHS Algorithm to Enable Self-Issued Sick Notes

April 22, 2024

Stenn reaches $10 billion in SME financing as...

October 25, 2022

The role of technology in modern commercial real...

May 17, 2023

Elon Musk’s government cuts could hand billions to...

February 17, 2025

UK Business Confidence slides and hiring falls, says...

August 7, 2023

Britain’s high streets saw 35 shop closures a...

March 20, 2025

Half of UK SMEs have had loan application...

September 5, 2022

Supply Chain Visibility Explained: Tools, Benefits, and Best...

January 27, 2025

Jeremy Hunt Faces Tight Battle for Seat in...

June 12, 2024

New survey reveals over half of SMEs planning...

April 23, 2024

New NHS Algorithm to Enable Self-Issued Sick Notes

April 22, 2024

Stenn reaches $10 billion in SME financing as...

October 25, 2022

The role of technology in modern commercial real...

May 17, 2023

Elon Musk’s government cuts could hand billions to...

February 17, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Digital divide widens as 74% of regional SMEs miss out on vital support

      July 8, 2025
    • Apple appeals €500m EU fine over App Store restrictions, accusing Commission of overreach

      July 8, 2025
    • UK steel firms on edge as US tariff deadline looms amid incomplete deal

      July 8, 2025
    • ThinCats hits record lending levels with £381m despite challenging UK business climate

      July 8, 2025
    • Flight of the non-doms: how worried should Labour be about the super‑rich leaving the UK?

      July 8, 2025
    • UK house prices stall in June as stamp duty change and weak economy hit confidence

      July 8, 2025

    Categories

    • Business (8,416)
    • Investing (2,105)
    • Politics (15,958)
    • Stocks (3,192)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved