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Last Updated: Tuesday, 4 January, 2005, 19:30 GMT
Tough market hits House of Fraser
House of Fraser store
Department store group House of Fraser has warned sales have suffered over the last five months in a "difficult and challenging" market.

In a trading update, the UK group said tough conditions had left sales in negative territory and like-for-like transaction levels 1.3% lower.

The group blamed store closures and shop refurbishments for the decline.

However, despite giving information on the second half of the year, the firm gave no details on Christmas sales.

We believe we have delivered a creditable performance in a difficult and challenging retail environment
John Coleman, House of Fraser
Many analysts had predicted Christmas would be tough on the high street. Woolworths, one of the first retailers to reveal its festive performance said sales were "flat" during the four week period.

Commentators claimed the House of Fraser update, which was originally slated for 12 January, may have been an attempt to fend off accusations from City watchdogs that it had withheld information which could affect the market.

'Stronger position'

Store closures in Bromley, Paisley and Inverness, as well as disruption to trade as stores in Manchester and Maidstone were revamped, saw total group sales slide 2.3%.

"We believe we have delivered a creditable performance in a difficult and challenging retail environment," chief executive John Coleman said.

The company added that profitability was up despite the fall in sales, while its gross margin was up slightly on the same period last year - partly due to stringent stock control which meant unsold stock levels were sharply lower.

Meanwhile, House of Fraser added that its finances for the current financial year will also benefit 25m from property transactions and a further 1m from a store card partnership with Barclaycard.

"We enter 2005 in a significantly stronger financial position following the recently announced property and store card transactions," Mr Coleman added.

"These, together with the opening of three new stores later this year, enable the group to look to 2005 with confidence."

Shares in the group closed 1.5p lower at 114.75p on the news.

Sales boost for House of Fraser
29 Sep 04 |  Business
House of Fraser holdings sold off
13 Sep 04 |  Business
House of Fraser upbeat on trading
15 Jun 04 |  Business
Weaker sales for House of Fraser
08 Jan 04 |  Business

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