Frasers Group’s profitability improved materially in the full-year ended 28th April as the fashion retailing group repositioned its product strategy to focus on better thought of brands.
The group has been associated with tired brands at the end of their life, which Frasers Group sold at a discount through outlets including Sports Direct.
The discounting even started to creep into House of Fraser, damaging perceptions of that brand and risked the entire group being perceived as a B&M for dead fashion brands.
The company set about rectifying this with its ‘Elevation Strategy’ focused on attracting a wider audience with high-profile brands – and it’s working.
The successful execution of the Elevation Strategy has strengthened brand partnerships, including the onboarding of new brands such as The North Face, On, and Columbia.
This helped drive a strong year with Adjusted Profit Before Tax (APBT) reaching £544.8 million, a 13.1% increase and at the upper end of the guidance range. Adjusted Earnings Per Share (EPS) saw a significant rise of 33.6% to 95.8p. The firm anticipates continued strong growth, projecting APBT for the fiscal year 2025 to be between £575 million and £625 million.
Sports Direct delivered year-on-year growth in both revenue and gross profit as the company strengthened relationships with third-party brands and worked on Sports Direct’s market positioning.
Demonstrating a clear growth strategy, Sports Direct are increasing presence in the Nordic countries, establishing a joint venture in Southeast Asia, and the ongoing acquisition of a leading sports retailer in the Netherlands.
“This has been a break-out year for building Frasers’ future growth. As well as delivering a strong trading performance, particularly from Sports Direct, we made significant progress with our Elevation Strategy,” said Michael Murray, Chief Executive of Frasers Group.
“We expanded our retail ecosystem, establishing valuable partnerships with new brands. Our brand relationships have never been stronger, giving us invaluable support as we continue the international expansion of our business. We invested in group-wide operational efficiencies in warehouse automation and digital infrastructure, which we expect to yield a tangible impact as early as FY25. And we generated new growth opportunities with the rollout of Frasers Plus, including recently signing our first third party partner in THG.
“I’m really proud of what we have achieved at Frasers this year and would like to thank all colleagues for their continued hard work and our brand partners for their support. Together, we are building a resilient, profitable growth retail ecosystem that delivers exceptional value for our partners, consumers and shareholders. We have built a lot of momentum this year and are entering the new financial year with many exciting growth opportunities ahead of us, which we will continue to invest in for the long-term benefit of the Group.”
A strategic partnership with THG plc has been agreed upon, which will integrate Frasers Plus into THG’s Ingenuity platform, marking the first external partnership for Frasers Plus.
The launch of Frasers Plus, the FCA-regulated credit scheme, has shown encouraging early performance as the group gets in on the finance game. Frasers have set ambitious long-term goals for Frasers Plus, including over £1 billion in sales, £600 million in balances with a yield exceeding 15%, and more than 2 million active customers.