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New HoF CEO bullish about future growth

House of Fraser is well positioned to return to growth by the end of the year following investment in its core operations, its new chief executive Alex Williamson has told Drapers.

In the 26 weeks to 29 July like-for-like sales at the retailer dropped 5.2% and the business made an adjusted EBITDA loss of £8.6m, compared with a £900,000 EBITDA loss in 2016, following a replatforming of its website and heavy discounting of its legacy in-house womenswear brands.

The retailer says the “one-off” costs have largely been resolved, as the old womenswear stock has been cleared, and online sales will have recovered in four weeks’ time.

Williamson, who joined the department store group on 31 July, said it is laying the foundations to deliver future growth.

“I’ve been in the business for seven weeks now and it is obvious that we have a great brand, a very engaged team and a lot of talent. There is a good plan in place and I don’t see any significant shift in that. My skill is to bring pace to that plan, and that’s what I’ll deliver.

“The investment of £100m over the last 24 months has put us in a brilliant position to capitalise on the value that already exists in the business. It has given us improved foundations and we will see the benefit in the second half and into next year.”

For autumn 17, five existing in-house HoF womenswear brands were dropped and the remaining four were relaunched. HoF said the early trading results of the newly designed brands were “very strong”, and some ranges were up 80-90% on the same week last year.

Williamson would not be drawn on further changes to product lines, but said the team had “ambitious plans” for the clothing category.

“Maria [Hollins, product and trading director] has done a brilliant job and it has given me confidence that we are in good shape to tweak the other categories – such as menswear and kidswear – when we choose to. There is no timeline on those at present, but we are ambitious.”

Williamson, who was previously CEO at The Goodwood Group, has been praised by HoF chairman Frank Slevin for his “track record of delivering customer-focused, engaging and compelling experience,” but the new boss insisted any experiential additions to the store portfolio will only be introduced when the basics are right.

“I have lots of experience in delivering experiences with emotional integrity that engage customers in interesting ways. It’s about having the right building blocks to give us the freedom and flexibility to add that joie de vivre. The plan puts us in a good position to add those extras in after the foundations are in place.”

The business expects to return to EBITDA growth in the all-important final quarter of the year, despite Brexit headwinds and subdued consumer confidence, Williamson said: “I believe our store and product offer is as good as it can be, and I’m optimistic that we’re well positioned to have good results during the key trading period, notwithstanding the external factors we don’t have control over. There are challenges we have to face in the retail industry, but we can adapt and deal with them. We have to back ourselves.”

 

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