Despite the challenges brought on by the Covid-19 pandemic and subsequent lockdowns, Frasers Group remains optimistic about its future prospects. The company recently released its delayed financial results, revealing a mixed picture of revenue growth and profit decline.
The Group reported a 6.9% increase in revenue to £3.957 billion, driven in part by acquisitions. However, on a currency-neutral basis, revenue actually decreased by 12.6%. UK Sports Retail saw a modest 0.7% rise to £2.2 billion, with the GAME acquisition contributing significantly to this growth. Excluding this acquisition, revenue fell by a substantial 14.6% due to Covid-19-related store closures.
Despite these challenges, Frasers Group is committed to its elevation strategy, with a strong focus on digital expansion. The company is aiming for a 10% to 30% improvement in underlying EBITDA in the current financial year, even as digital sales continue to rise and more store closures are anticipated.
Notably, premium lifestyle brands under the Frasers Group umbrella, including Flannels and House of Fraser, experienced a notable surge in revenue, up 34.9% to £722 million. This growth was driven by new store openings and recent acquisitions. Similarly, European Retail also saw growth of 16.3% to £697.7 million, largely due to the impact of the GAME acquisition. In contrast, Rest of World Retail saw a decline of 19.3% to £174.2 million.
While reported EBITDA showed a significant rise to £551 million, underlying EBITDA only increased by 5% to £302 million, underscoring the pandemic’s impact on profitability. To address this, Frasers Group plans to invest over £100 million in its digital elevation strategy, with a keen focus on enhancing the online customer experience.
Despite the ongoing challenges posed by the pandemic, Frasers Group remains steadfast in its goal of elevation. The reorganization and improvement of the House of Fraser business are key priorities, as the company aims to provide a premium customer experience in an elevated environment. By strategically focusing on digital transformation and store expansion, Frasers Group is positioning itself to overcome current challenges and achieve growth in the near future.
For more information on Frasers Group and its financial results, you can visit their official website here. Additionally, for insights into the impact of Covid-19 on the retail sector, you can explore this resource here.
