Retail giant to invest £100m in online growth

Retail giant Frasers Group is going to invest more than £100m in its online strategy as it targets a jump in profitability in the year ahead.

The group, which is headquartered in Shirebrook, reported a 20% drop in pre-tax profits, to £143.5m, for the year to April 26. Revenues continued to grow, rising 7% to £3.96bn despite a difficult end to the financial year because of the pandemic.

Non-executive chair David Daly said: “Frasers Group itself has always taken a long term approach to its strategy and this has helped us, and will continue to help us, through these unprecedented times. We believe our business is strong as is our balance sheet.”

The FTSE 250 business is owned by its chief executive Mike Ashley, who holds a 61% stake in the retailer.

The group rebranded from Sports Direct last year to reflect its broad portfolio of brands, which include House of Fraser, Flannels, Jack Wills, Evans Cycles and Game. It has more than 1,500 stores worldwide.

Frasers is following an “elevation” strategy and its digital investment is a key part of that.

It is forecasting an increase in its underlying EBITDA, which measures operational profitablity, of between 10-30% in the year ahead.

This would add £30m-£90m to its 2020 figure and be a significant step up from the trend of the last two years.

The digital investment will have a particular focus on Flannels and an enhanced customer experience.

Frasers is also applying its elevation strategy to its stores with “new generation stores” in Leicester and Watford.

It is investing £15m in a megastore at Fosse Park that will mostly be split between Flannels and Sports Direct, while including space for other group brands USC, Evans Cycles and Game.