Store chain profits rise with own brands

House of Fraser saw like-for-like sales rise by around 7.5 per cent in the three months to July, after a 10 per cent increase the previous quarter.

The group, which has 62 stores in the UK and Ireland, is benefiting from a decision to focus on more profitable own brands – a tactic that saw earnings rise by more than 20 per cent in the year to January 31.

Earlier this year the retailer, which has stores in Doncaster, Grimsby, Huddersfield, Hull, Leeds, Sheffield and Skipton, reported its best ever Christmas thanks to strong demand for its in-house brands.

Other groups have also refocused on in-house ranges rather than concessions to shore up results amid tougher times for retailers.

Debenhams has made the move to concentrate on its exclusive ranges such as Designers at Debenhams, although this has exacerbated weaker sales in recent weeks – down 0.4 per cent in the 42 weeks to June 19.

House of Fraser's strategy has seen the group not only develop its own lines, such as Linea and Episode, but also buy or hold the licence to sell established brands.

It will relaunch iconic Sixties label Biba this September.

The group secured an overhaul of its lending terms earlier this year in a move allowing it to ramp-up expansion and buy more stock.

As well as introducing new ranges such as Biba, it is also refurbishing stores and is working on plans to open its first store in the Middle East under a partnership with Retail Arabia International.

The inaugural outlet is set to launch in Abu Dhabi in 2012, with potential for others in Cairo, Riyadh, Jeddha, Dharan, Muscat and Doha.

House of Fraser began life in 1941 as the drapery business Fraser, Sons & Co in Glasgow and was taken private by Highland Holdings, a consortium led by the now-defunct Icelandic retail investor Baugur, in a 351m deal in November 2006.

The group was part of an extensive portfolio of British businesses backed by Baugur before it collapsed, with Baugur's 33 per cent stake reverting to fellow Icelandic bank Landsbanki.