The owner of Sports Direct and Flannels has said sales at its UK retail businesses have fallen amid heavy discounting by rivals and “severely depressed” consumer confidence.
Frasers, which is controlled by former Newcastle United owner Mike Ashley, said sales at its UK sports division fell 5.8% to $1.3 billion in the six months to October 26, despite growth in the main sports direct chain due to “planned reductions” in its sports outlets and studio retail online arm.
Michael Murray, chief executive of Frasers Group, which also owns House of Fraser department stores, Jack Wills and dozens of other brands and a number of shopping centres, said “market conditions are tough” and “consumer confidence is very depressed”.
His comments came as analysts at consulting firm BDO said Black Friday had “failed to drive any meaningful sales growth for retailers” as they were forced to offer heavy discounts to tempt shoppers.
BDO’s regular survey of a group of medium-sized retailers, many of which are fashion chains, found that sales rose 3.4 percent in November, but if the effect of new store openings and closures is excluded, same-store sales rose just 1.3 percent.
Sophie Michael, head of retail and wholesale at BDO, said: “Black Friday failed to drive any meaningful growth in sales for retailers or get shoppers to spend in stores in November.
“Sales on the high street registered minimal growth, and while online sales performed better, retailers offered heavy discounts in November to generate these sales, further pressuring their margins.”
Declining consumer confidence and broader economic conditions are “unlikely to encourage many shoppers to go out and spend” on non-essentials, he said.
“While retailers may have thought consumers were holding back until the budget, which was extremely late in the ‘Golden Quarter,’ the expected spike in Black Friday discretionary spending has not panned out,” Michael said.
Frasers Group said it was cautious about the second half of its financial year but still expected to meet full-year profit expectations of up to $600 million after a massive increase in the value of its investment in the Hugo Boss brand boosted its bottom line.
Sales at its premium division fell 3.7 percent as it said it will further close Fraser, Jack Wills stores and outlets in 2022 for a string of brands it bought from JD Sports, including Liam Gallagher’s Pretty Green and 1980s brand Tissot.
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The group’s total sales in the half-year rose 5% to $2.6 billion, following strong growth internationally where the group has spun off a number of new businesses, and pre-tax profits rose to a massive €2 412m as a result of Hugo Boss’s rising share price. Operating profit rose 18 percent to $219.8 million.
Frasers said: “Trade has improved compared to last year’s budget-hit period. It’s still weaker than it was. [the year to April 2024]the sector continues to weigh on the broader market with high inventory. .
Murray said: “We’ve had a solid start [the year to April 2026] Although market conditions are tight, consumer confidence remains subdued and excess inventory continues to weigh on the industry, leading to increased promotional activity. While we remain cautious in the second half, our focus is unwavering as we face these challenges.
