Earnings bounce for SCS despite hit from House of Fraser concession arm

0 The group reported growth in its core SCS retail business Sofa retailer SCS has overcome weak summer trading and a hit from its House of Fraser concessions to post a doubledigit hike in full-year profits.

The chain said its 27 concessions within House of Fraser stores had a “particularly challenging year”, with gross sales in the division falling 9.4 per cent to £24.8 million in the year to 28 July. It is now in talks with Sports Direct over the future of the concessions after Mike Ashley’s sportswear empire bought the department store operator out of administration.

SCS also overcame a 2.6 per cent fall in second-half sales caused by lower demand amid the heatwave and World Cup tournament.

Yesterday’s results showed that despite the trading woes, full-year pre-tax profits rose 10.5 per cent to £13.2m.

The firm said sales since the year-end had gathered pace, rising by 2.1 per cent on a likefor-like basis in the nine weeks to 29 September.

Chief executive David Knight said: “The downturn in sales in our House of Fraser concessions has been more than offset by growth in our core SCS business.

“This has been aided by record results from our online channel, which has seen a 22.6 per cent increase in gross sales.”

Analysts at Shore Capital noted:“scshasdeliveredwhat we deem, against a far from easy backdrop, an excellent set of 2018 results with growth in both sales and margins.

“House of Fraser’s plans going forward still appear unclear but we note SCS management is in discussion with the new owners to attempt to agree new terms of trade.”

● Mike Ashley has dismissed House Of Fraser’s senior management team, it has emerged. The tycoon has said that he wants to turn the department store chain into the “Harrods of the high street”.