Cracker of a Christmas for House of Fraser

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Department store chain House of Fraser said a surge in online sales had helped it to its best ever Christmas trading period.

The group, which trades from 61 stores across Britain and Ireland and has annual sales of around £1.2bn, said like-for-like sales excluding VAT for the three weeks to December 28 were ahead by 7.3 per cent, with online sales rocketing by 57.7 per cent. Like-for-like sales excluding VAT for the first nine weeks of its fourth quarter were up 4.3 per cent, the retailer said, adding that it expected to finish the year with lower net debt, which stood at £157.2m for the year to January 26, 2013.

According to industry sources last month, French department store group Galeries Lafayette is in talks to buy House of Fraser for at least £450m.

The company, which made a loss before tax and exceptional items of £6.9m in its last fiscal year, has spent almost a decade under private ownership, but had been considering a return to the stock market after previous attempts at a possible trade sale failed.

House of Fraser, which has stores in Leeds, Hull, Sheffield, Skipton, Huddersfield and Grimsby, embarked on a festive season discounting spree as it reduced selected lines by 50 per cent.

However, promotions did not knock back profit margins, which were up sharply.

Chief executive John King said: “We are delighted with our Christmas trading and are pleased to report another record performance despite a more competitive environment.

“As expected, the peak Christmas trading came late. However it was the best we have ever recorded.”

Store sales surged ahead by three per cent over the festive three weeks.

Mr King said the performance demonstrated the success of the retailer’s strategy to improve its online offering, develop own brands and invest in stores.

He said the trading figures mean the group is on course to deliver a rise in full-year earnings.