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[January 07, 2013]
Christmas sales: House of Fraser celebrates online surge
(Guardian Web Via Acquire Media NewsEdge) Online shoppers helped make it a Christmas cracker for House of Fraser, which defied the retail gloom to announce a 6.3% rise in like-for-like sales over the festive period.
The sales boost will help House of Fraser meet expectations for an 2.4% rise in earnings this year. It started slashing prices before Christmas – with discounts of up to 50% on party dresses and key gifts such as makeup and perfume – which helped drive record sales in the two weeks running up to Christmas.
The company's chairman, Don McCarthy, said it had been a more competitive environment, but House of Fraser had benefited from investing in its website, driving its house brands, and setting itself up as a fashion-focused department store.
Online sales rose by almost 50% in the six weeks to 5 January and the company saw a huge boost in people shopping on mobile devices such as phones and iPads.
UK shoppers flocked online over Christmas to avoid the trek to overcrowded shops. Market research company Experian said overall online sales jumped by 27% on Christmas Day.
Kate Calvert of Seymour Pierce said: "Online really had a stonking Christmas, particularly when you have a look at the likes of John Lewis, that bodes well for others. House of Fraser is coming from behind relative to others, so I would expect a strong number." The department store has ploughed money into its website, which offers blogs and fashion tips as well as an online shop.
House brands, such as Biba, continued to do well, with sales up 10% over the period. Accessories were also flying off the shelves, with the group shifting around 45,000 pairs of shoes a week and 40,000 handbags.
The company said the retail environment last year had been tough and it was not clear when it would pick up again.
McCarthy said: "There is no doubt that 2012 was a challenging year in retail and it remains difficult to predict when economic conditions and consumer sentiment will improve. However, with the strong sales performance in the period and a close focus on margins and operational efficiencies, we expect to report growth in full year earnings in line with previous indications." The company is forecasting full-year earnings of £60m.
House of Fraser's fortunes contrast sharply with those of supermarket chain Morrisons, which posted a 2.5% decline in like-for-like sales over Christmas.
(c) 2013 Guardian Newspapers Limited.
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