House of Fraser Group revealed a loss of nearly £44m for the year to December 31, compared with a profit of £1.5m in 2016, as one-off start-up and operating costs in China dented revenue.
In a statement released on the Hong Kong stock exchange, C Banner, the Hamleys owner that is buying a 51% stake in the department store chain, said House of Fraser group sales fell 6% to £787.8m for the year, which it blamed on a “challenging year for the business”.
However, these group figures do not include a £5m licence fee payable from House of Fraser China to House of Fraser UK for the use of the name, or the sale of some house brands for £25m, as this was announced in January 2018. These numbers will be shown in the results for House of Fraser’s UK arm, which has a year-end of January 2018. They are expected to be released next month.
With reference to the UK, C Banner said: “The Brexit referendum and the UK’s resultant decision to leave the European Union [plus] the terrorist attacks in London, combined with a rapidly evolving retail market, produced a period of uncertainty and volatility that resulted in a difficult trading environment for the whole retail industry in the UK.
“Nevertheless, the Directors believe that as a leading department store chain in UK, [House of Fraser] will be able to take advantage of its well-known brand to capture growth potential.”