“People buy now to wear now more than ever before, so if you have an autumn range on sale and it is 90 degrees outside, that will definitely have an impact on sales,” said House of Fraser chief executive Nigel Oddy today.
Nigel Oddy, House of Fraser
Sales at HoF were flat at £573.3m for the 26 weeks to July 30, compared to the same period last year, while gross profit inched up £2.5m to £207.2m.
Oddy said he was encouraged by the firm’s improvement in gross profit and margin “given the volatility of the market and low consumer confidence”.
He said unseasonably low temperatures in June and high temperatures in September contributed to a difficult trading environment in the UK.
“We do feel consumer confidence in our market is low, particularly in womenswear, and that is down to a combination of things,” he told Drapers earlier today.
“The weather is a factor, everyone is still trying to understand what Brexit means and there is turbulence in the global economy.”
However, Oddy was cautiously optimistic about fourth quarter trading, particularly Black Friday and Christmas, when the firm typically delivers around 85% of its annual profit.
“People return to the high street to do their Christmas shopping so we are feeling quite optimistic about the months ahead,” he said.
HoF’s Black Friday activity will be a continuation of the brand event it typically holds before Christmas in late November.
“We have worked closely with our brand and concession partners, as well as our own suppliers to create some great offers and as with the past two years, we hope it will kick start the Christmas period,” said Oddy.
“It will be interesting to see how it plays out this year as the first year Black Friday fell on a pay day, which was something of a perfect storm, and last year it was three days’ adrift. This year pay day is the following week, so that may make a difference to how the industry reacts. We’re still finalising our plans but it will likely be over the full weekend.”
HoF is trying to limit its discounting activity so it did not hold a “brand event” last week, as it did the previous year. It also tightened its mid-season Sale.
“However, we are all aware of how aggressive the retail market is so it is a case of managing discounting while giving the competition a run for their money,” explained Oddy.
The firm is poised to open its first store in China in Nanjing. An official opening ceremony will take place at the end of the year.
Oddy would not give a specific date for the store opening, but said he was there two weeks ago to see its atrium and glass roof, which is inspired by the Fraser store in Glasgow. Oddy described it as a “hybrid” of British and Chinese influences.
“The external façade looks fantastic, the signage looks great and Hamleys opens next door to us next week, too. We are taking some brands we work with in the UK like Ted Baker and some we don’t like Cambridge Satchel Company, as well as other international brands and some local ones.”