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House of Fraser reports solid Xmas

House of Fraser recorded a like-for-like sales fall of 1.5% for the five weeks to January 3 and has made moves to reassure the market about its financial position.

House of Fraser said in a statement that total sales rose 4.5% over the period. Gross profit was up on the same period last year and that stock had been reduced by 10% compared with last year.

The performance appears to be ahead of rival department store debenhams“>Debenhams, but it should be noted that the figures refer to a much shorter period. Debenhams saw like-for-likes fall 3.3% for the 12 weeks since October 21. Both Debenhams and House of Fraser launched heavy pre-Christmas promotional Sales.

House of Fraser reiterated to the market it is in a strong financial position, following market speculation about difficult trading at the department store. It said it remained fully compliant with all its banking conditions.

It added it had cash deposits in excess of £85 million and that it has an available working capital facility of £100m , which was undrawn for most of last year.

The department store also said that it had reviewed capital expenditure for 2009, and there would be no major projects coming on stream, meaning the pressure for capital had been reduced.

House of Fraser said it was ahead of schedule in repaying its debt. On January 2 the department store repaid £34.5m, representing the full repayment of another of its ring-fenced facilities. It said it had now repaid or cancelled more than £140m of its facilities arranged at the time of the acquisition in 2006.

House of Fraser chairman Don McCarthy said: “There is no doubt that the retail sector has experienced one of its toughest years to date. However, our performance over the Christmas period was positive and we are satisfied with the robustness of our business.”

He added that House of Fraser’s brand mix would change this year, with underperforming partners being dropped from the department store. “The outlook for 2009 remains challenging and we will continue to focus on managing our business accordingly so that our positive performance can continue throughout the new year. However, we do anticipate changes to our brand portfolio, as underperforming brands will leave our business and brands that are performing well will grow alongside new brands introduced during the year,” said McCarthy.

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