Frasers bucks retail misery

DEPARTMENT store chain House of Fraser yesterday revealed that underlying profits jumped over the first half of the year as sales strengthened despite the challenging retail environment.<br /><br />House of Fraser, which was taken private in 2006 by a consortium that included now-bust Icelandic investor Baugur, Scots entrepreneur Sir Tom Hunter and the firm&rsquo;s chairman Don McCarthy, said earnings before interest, tax, depreciation and amortisation (Ebitda) rose to &pound;10.7m in the 26 weeks to 25 July, 16.3 per cent higher than the same period last year.<br /><br />Like-for-like sales were down 2.7 per cent over the period overall, though they grew by half a per cent in the second quarter as the retail sector started to show signs of recovery.<br /><br />&ldquo;Despite the tough trading environment the board remains confident for the outlook of the business and is continuing to see the sales trend strengthening,&rdquo; the group said in a statement.<br /><br />House of Fraser cut its net debt by 6.7 per cent over the first half to &pound;293.9m, which it said was &pound;100m ahead of plan. It expects to be able to continue to reduce debt over the second half of the year and to deliver a further improvement in earnings.<br /><br />Chief executive John King added that the group had seen an increase in trading in its key menswear, accessories and beauty categories over the period, while sales in the home category had also strengthened over the past two months.<br /><br />House of Fraser had more good news for the sector as it revealed trading since the period end had been even more encouraging. Like-for-like sales for the six weeks to 5 September were up 1.3 per cent on last year.