ScS is sitting pretty despite hit to House of Fraser concessions
SOFA chain ScS has shrugged off a hit from its House of Fraser concessions and poor summer sales to post an 11% rise in annual profits.
The Sunderland-based retailer said its 27 concessions within struggling House of Fraser stores had a “particularly challenging year”, with gross sales in the division tumbling 9.4% to £24.8m in the year to July 28.
It is in discussions with Sports Direct over the future of the concessions after Mike Ashley’s sportswear giant bought the department store out of administration.
Despite lower sales and earnings in the concessions, ScS posted a 10.5% rise in full-year pre-tax profits to £13.2m.
It also overcame a 2.6% slide in second-half sales caused by lower demand amid the heatwave and World Cup football tournament.
ScS said like-for-like orders rose 0.2% over the year as a whole.
It added that sales since the year-end had also picked up, rising by 2.1% on a like-for-like basis in the nine weeks to September 29.
Shares jumped 7% after the results.
David Knight, chief executive of ScS, 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% increase in gross sales.”
But the group acknowledged it has been a “particularly difficult time” for the 124 staff in its House of Fraser concessions, which continue to be impacted by trading woes.
ScS said it was in talks with Sports Direct “with a view to agreeing a mutually beneficial arrangement, which will allow us to continue trading in a profitable manner in as many of the current concessions as possible”.
Sports Direct bought House of Fraser in August, just hours after it went into administration.