‘Powerful market situations’ hit UK half-year retail gross sales at Frasers Group

[ad_1] The proprietor of Sports activities Direct and Flannels has mentioned gross sales have fallen at its UK retail companies amid heavy discounting by rivals and “very subdued” client confidence.

Frasers, which is managed by the previous Newcastle United proprietor Mike Ashley, mentioned gross sales at its UK sports activities division have been down 5.8% within the six months to 26 October to £1.3bn regardless of development on the most important Sports activities Direct chain due to “deliberate decline” at its Sport shops and the Studio Retail on-line arm.

Michael Murray, the chief govt of Frasers Group, which additionally owns Home of Fraser shops, Jack Wills and dozens of different manufacturers and plenty of buying centres, mentioned “market situations are robust” and “client confidence could be very subdued”.

His feedback come as analysts on the advisory agency BDO mentioned Black Friday had “did not drive any significant gross sales development for retailers” as they have been pressured to low cost closely to tempt consumers.

BDO’s common survey of a bunch of medium-sized retailers, a lot of that are trend chains, discovered that gross sales rose 3.4% in November, if the impact of recent retailer openings and closures was excluded, with in-store gross sales contributing simply 1.3% development.

Sophie Michael, the pinnacle of retail and wholesale at BDO, mentioned: “Black Friday did not drive any significant gross sales development for retailers or get consumers spending in shops in November.

“Gross sales on the excessive road registered minimal development, and whereas on-line gross sales carried out higher, retailers discounted closely all through November to generate these gross sales, which may have put additional strain on their margins.”

She mentioned a fall in client confidence and the broader financial situations have been “unlikely to have inspired many consumers to exit and spend” on non-essentials.

“Whereas retailers might have thought that customers have been holding again till the price range, which was unhelpfully late within the ‘golden quarter’, the anticipated surge in Black Friday discretionary spending simply hasn’t materialised,” Michael mentioned.

Frasers Group mentioned it remained cautious in regards to the second half of its monetary 12 months however nonetheless anticipated to satisfy full-year revenue expectations of as much as £600m, after its backside line was boosted by an enormous improve within the worth of its funding within the Hugo Boss model.

Gross sales fell by 3.7% at its premium division because it mentioned it had closed extra Home of Fraser, Jack Wills shops and shops referring to a string of manufacturers it purchased from JD Sports activities in 2022 together with Liam Gallagher’s Fairly Inexperienced and Nineteen Eighties model Tessuti.

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Whole gross sales for the group rose 5% to £2.6bn within the half 12 months, after sturdy development internationally the place the group has snapped up plenty of new companies, and pre-tax income nearly doubled to £412m largely on account of the elevated worth of the Hugo Boss stake. Working income elevated 18% to £219.8m.

Frasers mentioned: “Buying and selling has improved in comparison with final 12 months’s budget-affected interval; it's nonetheless weaker than [the year to April 2024], with extra stock within the sector persevering with to weigh on the broader market.” .

Murray mentioned: “We’ve made a stable begin to [the year to April 2026] although market situations are robust, client confidence could be very subdued and extra stock continues to weigh on the business, resulting in elevated promotional exercise. Whereas we stay cautious into the second half, our focus is unwavering as we confront these challenges head-on.”