British fashion and retail giant Frasers Group has welcomed a significant uptick in its profits amid what its chief executive, Michael Murray, called a “break-out year”. In the report, Murray said that Frasers made “significant progress” with its Elevation Strategy, expanded its retail ecosystem, strengthened brand relationships, and generated new growth opportunities, among many other things.

This was ultimately reflected in the company’s adjusted profit before tax (APBT) that, despite lower profits from the disposal of properties and subsidiaries, jumped up 13.1 percent to 544.8 million pounds in the 52 weeks to April 28, 2024 (FY24). This figure was bolstered by the return to “more normalised levels” of property and acquisition related impairments and the “rationalisation of loss-making stores”.

Retail profit for the period dropped 0.9 percent to 738.9 million pounds. Here, Sports Direct’s “strong” trading performance was offset by anticipated declines in Game UK and Studio Retail, the planned store closures of House of Fraser and a “softer luxury market”. Reported profit before tax fell 20.5 percent, driven by a decrease in foreign exchange gains, among other things.

Decreases could also be seen elsewhere. While the group did see its gross margin rise from 42.9 to 43.3 percent, retail revenue declined 1.3 percent. Revenue for its UK Sports category, which accounts for 51.7 percent of total group revenue, also fell 3.3 percent, despite gross profit increasing by 28.9 million pounds “reflecting an improved product mix at Sports Direct”.

Softer luxury market and House of Fraser store closures cause revenue drops

Frasers’ Premium Lifestyle business, meanwhile, saw revenue drop by 1.2 percent, while its profit from trading was broadly flat at 137.2 million pounds and its gross margin reduced to 35.8 percent due to the impact of House of Fraser store closures. With these figures in mind, Frasers said that its long-term ambitions for the business remained unchanged despite it being “likely that progress will remain subdued for the short to medium term in the face of a softer market”.

In a more positive spin, international retail, accounting for 23.3 percent of total group revenue, welcomed a revenue uptick of 3.3 percent due to the growth of Sports Direct’s international business, and the acquisition of MySale in Australia during FY23. Despite profit from trading falling 14.9 percent YoY, Frasers remained optimistic about the sector as it continues to “explore opportunities for growth having invested in [its] Indonesian joint venture” and welcomes Dutch retailer Twinsport.

In response to the results, Murray thanked colleagues for their hard work and brand partners for their support, before stating: “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."

Looking ahead into FY25, Frasers said it remained confident that its Elevation Strategy would continue to deliver strong performance, with its automation programme and acquisition integration expected to drive “significant synergies”. With this, in addition to the continued expansion of its UK and international retail business, it forecasted a “sustainable multi-year profitable growth”, expecting to achieve a “strong increase” in APBT in the range of 575 and 625 million pounds.