Freemans Grattan Holdings (FGH), the UK arm of German home shopping giant Otto Group, has been granted a £10m cash injection from its German parent to help stem losses at the UK business.
FGH (formerly known as Otto UK) chief executive Koert Tulleners said the money was a “sign of confidence” from its German parent and came as turnover at FGH fell by a third to ¤262m (£224m) in its full year to February 28 after a year of restructuring.
Tulleners said: “This will increase our operating capital. We were running at a major loss last year. We have nothing planned [with the money] for stores or brands.”
He declined to break out the figure for the losses during the year but added that he expected FGH to return to profit this financial year.
“This has all been done to bring the business back to a profitable basis,” he said.
Tulleners said that FGH was performing more strongly this year after cutting costs by more than a third, including cutting about 2,300 of its 3,800-strong UK workforce.
As part of its restructuring, FGH centralised much of its buying team into Germany last year.
Tulleners added that FGH’s mature womenswear collection Kaleidoscope and value brand Bon Prix had performed well so far this year.
Tulleners said that in the same way that a bricks-and-mortar store loses sales after closing stores, the home shopping retailer had lost money after reducing the size and circulation of its catalogues.
FGH - which is based in Bradford - also runs young fashion etailer Oli.
Tulleners joined the UK business in September 2008 to spearhead a major overhaul of the UK business.
Several home shopping groups have had to cut jobs and close parts of their business in the past few years as the traditional catalogue shopper migrates online, which many see as a more convenient way of purchasing.
Last week, Shop Direct Group, which runs Littlewoods and Woolworths, shut down its call centre in Sunderland.
The home shopping group said in January that 900 jobs across three contact centres would be put under consultation as more of its sales migrated to online.
It is understood that the majority of those jobs have been axed.