House of Fraser streamlining own-brand womenswear offer

Endaba Group

House of Fraser is streamlining its womenswear own-brands offer in an attempt to stem declining sales of the ranges. The department store group’s first-half results yesterday showed like-for-likes up 0.9% and total sales flat. However within that, ’house brand’ sales tumbled 3.9%. Chief Executive Nigel Oddy intends to trim the number of womenswear own-brand labels it offers and reassert their value credentials.

Newly recruited Maria Hollins, the former Asos director who joined House of Fraser in May this year, is responsible for slimming down the offer and is in the process of doing so. She will be revisiting every one of their house brands, and is looking at overlap and value, as their house brands cannot be more expensive than branded.

House of Fraser chiefs have said they want to raise the proportion of sales from house brands from between 15% at present to 25% in the longer term, achieving a trading margin of at least 55%. House of Fraser’s gross profit edged up but its EBITDA fell steeply from £9.2m to £1.1m. £3.9m of that was owing to a reduction in its financial services income and chief financial officer Colin Elliot blamed the remainder of the shortfall on ecommerce operating costs.

New Chief Customer Officer David Walmsley, who arrived from M&S to replace his high-profile predecessor Andy Harding in August, will seek to ensure the ecommerce margin overtakes the stores’ margin by the end of the 2017 financial year. If he can do that, and Hollins can improve the performance of own-brand labels, House of Fraser will be better placed to succeed in the long term as the department store sector adjusts to changing consumer preferences.