What: Frasers Group's House of Fraser shows improved profitability amid strategic store closures and cost-cutting measures.

Why it is important: It demonstrates the effectiveness of restructuring and cost-cutting strategies in the challenging department store sector.

House of Fraser, owned by Mike Ashley's Frasers Group, has more than doubled its pre-tax profit to GBP 40.5 million for the year ending April 30, 2023, despite a revenue decrease from GBP 363.5 million to GBP 348.8 million. This improvement came amid the closure of several stores, with the chain operating 31 locations by year-end, down from 39 at the start. The company attributes its strong performance to cost-tightening measures and efficiencies, which have led to greater profitability despite lower revenue. House of Fraser continues to focus on its "elevation strategy," improving customer experience across all channels and enhancing its product offerings.

Store revenue fell from GBP 308.8 million to GBP 300.4 million, while royalty income decreased from GBP 54.7 million to GBP 48.4 million. The average number of employees also reduced from 2,915 to 2,567. This performance is part of a broader trend within Frasers Group, with another brand, Jack Wills, showing similar patterns of maintained profitability despite reduced revenue and store count. The results highlight the group's strategy of streamlining operations while focusing on profitability in a challenging retail environment.

House of Fraser’s profit doubles amid store closures