Frasers Group, a well-known retail giant, recently unveiled its financial report for the first half of the year. Despite facing a small dip in sales, which was anticipated given the temporary closure of many of its stores, the company managed to see an increase in profits, showcasing resilience amidst tough times.
During the 26-week period leading up to October 25, the group reported a 7.4% decrease in revenue, amounting to £1.89 billion. However, this decline was somewhat offset by the recent acquisitions made by the company. Even without factoring in these acquisitions, and on a currency-neutral basis, the revenue only dropped by 11.2%.
Frasers Group’s premium lifestyle division saw a noteworthy 4.8% increase in revenue, reaching £320 million. This growth was primarily driven by the launch of new luxury Flannels stores, a surge in online sales, and the full integration of acquisitions such as Jack Wills and Sofa.com from the previous year. On the other hand, the UK sports retail division experienced a revenue decrease of nearly 10% to £1.07 billion due to store closures, with online sales playing a crucial role in balancing out the decline.
While retail in Europe witnessed a 3.7% decrease and the rest of the world saw a 16.3% drop, Wholesale & licensing experienced an even larger fall at 21.5%. Despite these challenges, the group’s gross margin experienced a slight uptick to 44%, and underlying EBITDA surged by 25% to £226.3 million. Pre-tax profits also saw a healthy 18% increase to £106.1 million.
The successful reopening of stores in England on December 2nd, along with robust online sales performance, has prompted the company to raise its full-year guidance for FY21. Frasers Group now anticipates a 20% to 30% improvement in Underlying EBITDA for the fiscal year.
Chairman David Daly underscored the significance of the company’s online presence in cushioning the impact of store closures. He also highlighted the deepening of relationships with key suppliers like Nike, Burberry, and Hugo Boss. Noteworthy is the increased investment in key suppliers such as Hugo Boss and Mulberry, demonstrating the company’s dedication to sustainable growth.
Frasers Group is heavily investing in its stores and digital elevation strategy, with a special emphasis on enhancing the Flannels business. With a focus on innovation and elevating the customer experience, the company aspires to continue its upward trajectory in the retail landscape. Despite the hurdles presented by the global pandemic, the company remains bullish on its future outlook and is poised for further expansion in the years to come.
For more information on Frasers Group, visit their official website or check out the latest news on their financial performance at Reuters.
