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HoF chairman Don McCarthy to leave as Sanpower takes over

House of Fraser chairman Don McCarthy has confirmed he will step down as chairman once the business is sold to Chinese group Sanpower’s Nanjing Cenbest subsidiary.

In a statement this morning, revealing strong full-year results, McCarthy said he would leave “upon completion of the transaction”. He thanked staff and brand partners for “their hard work and continued support throughout my time with the business”.

He said the acquisition would allow HoF’s “management team to continue to grow and invest in the business in the UK and Ireland, provide a strong platform from which to expand the brand in international markets and to further develop our multichannel, stores and premium fashion offering”.

Drapers first reported he planned to step down back in February.

The confirmation of his departure comes as the department store business reported its highest-ever gross profit – up £26.8m to £430.6m – in the year to January 25.

Like-for-like sales rose 3.6% to £1.2bn, with online sales rocketing 41% and now representing 12.2% of turnover.  Adjusted EBITDA rose £60.2m, up 8.3% on 2013.

HoF’s own brands, which include Linea, Label Lab and Army & Navy, saw sales growth of 13%. Cash margins were up 20%. During the year, the business launched an Italian-inspired men’s formalwear collection called Corsivo.

Net debt has been reduced by £25.8m to £131.m, and the pension deficit was more than halved from £46.9m to £20.6m.

The figures are unaudited, with full results due out on April 29.

According to HoF, the first 11 weeks of 2014 have continued this momentum, with sales up 3.3% to April 12.

Chief executive John King said: “We are pleased to report another new record level of sales and gross profit for the year and a further improvement in the group’s earnings. The improved performance has been driven by the continued success of our key strategic pillars.”

He added: Following the recent announcements, the management team and I are really looking forward to working closely with Nanjing Cenbest and the wider Sanpower group to enable House of Fraser to further develop the business domestically and internationally.”

 

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