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House of Fraser first half profits boosted by online sales

House of Fraser’s adjusted EBITDA for the half year to July 26 increased 14.6% year on year to £8.6m, driven by strong growth online.

Online sales excluding VAT increased 29%, representing 14.2% of total sales. HoF said a “well-received” redesign of the website had driven a higher number of customer visits and higher conversion of visits to sales.

The department store chain’s net debt fell from £225.6m in the first half of 2013 to £218.2m, while its gross profit was up 13.4%. It did not reveal a figure for its gross profit. Total gross transaction value (total sales excluding VAT through the business/tills before it is allocated, for example to concession partners) was up to £542m, with like-for-like sales excluding VAT up 4.2%.

HoF recorded growth across all categories, with menswear up 9.7%, fashion accessories up 4.7% and womenswear up 3.4%. Sales of its house brands grew 10.7%.

During the period HoF introduced a number of new brands and product lines, including Arcadia brands such as Miss Selfridge.

HoF’s store performance was also positive, with bricks and mortar sales up 1.2%.

HoF said its sales performance in the second quarter was strong and the first eight weeks of Q3 had shown further improvement, with like-for-like sales up 6.6% year on year.

Chief executive John King said: “We are very pleased with our performance over the last six months, which has been driven by the continued success of our leading multichannel offering and the strength of our premium branded proposition.

“Earlier this month, Nanjing Cenbest completed the acquisition of House of Fraser, providing us with a strong platform from which to expand our business in international markets and to further develop and invest in our multichannel offering, our store portfolio, growing our house brands and introducing exciting premium brands.

“As a business, we are committing £150m of investment in the UK over the next four years to further improve the shopping experience for our customers, through better store environments and developments to our online platform. We are excited by our future growth prospects both in the UK and abroad.”

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