The retail giant behind brands such as Sports Direct, House of Fraser, GAME and Evans Cycle has reported surging profits thanks to a number of high profile acquisitions.
New figures show that in the six months to the end of October, Frasers Group sales increased by 12.7 per cent to £2.64 billion, while pre-tax profits were up 53 per cent to £284.6 million.
Management at the Derbyshire-headquartered business, which is majority-owned by Mike Ashley, said more takeovers could be on the cards over the coming months as competitors come face-to-face with a tightening economy.
Recent acquisitions include Missguided, Studio Retail and the Coventry City stadium and it has also just announced taking over the Manchester-based I Saw It First brand for a token £1.
The group said its successes showed that its growth plan aimed at expanding the upmarket side of the businesses, being led by new chief executive Michael Murray, was on track.
That has seen the company grow its stake in German brand Hugo Boss to 34 per cent, and it bought Savile Row tailor Gieves & Hawkes last month.
Mr Murray told the PA news agency that the group was pleased with the performance of its acquisitions and sees more opportunities on the horizon.
He said: “We have a clear strategic acquisition plan and we have been able to bring in strong brands that can help the wider business.
“Gieves & Hawkes, for example, taps into a longer-term trend towards formalwear and provides us with an extra expertise there that we can utilise across the business.
“There will be a lot of opportunities this year. As long as a business fits in with our strategy we will absolutely explore the possibility of acquiring more brands over the year.”
The chief executive, who took over from Mr Ashley, his father-in-law, last year, also stressed the firm’s commitment to UK high streets.
He said: “We are really committed to high street stores and have already seen results from investment in Flannels stores, and plan more in major cities across the country.”
Nevertheless, Frasers highlighted that the economic backdrop is “clearly challenging” amid rising costs for consumers.
It said it remains confident that it will meet its profit guidance of between £450 million and £500 million for the full year.
Russ Mould, investment director at online stockbroker AJ Bell said the soaring profits showed the business was able to make good money from its expanding empire and offer the type of products that consumers are still eager to buy.
He said: “It puts Michael Murray off to a good start as chief executive and shows to the market that the business is still capable of thriving without Mike Ashley at the wheel.
“Frasers is often misunderstood, with many people thinking it is just about Sports Direct and the pile ‘em high, sell ‘em cheap mentality. In fact, Frasers has a growing premium retail offering in the form of Flannels which sells luxury designer fashion for adults and children.
“The roll-out of new Flannels stores, and success with the online channel, were behind 22.2 per cent organic revenue growth from that part of the business in the period.
“Weak retailers are going to struggle in the current environment and so Frasers may be ready to pounce on any opportunities to buy known brands on the cheap.
“The company’s game plan is to acquire brands or businesses that will help to expand its skillset and customer reach, whether that’s a posh menswear outfit to support Flannels, a credit offering to cater for a certain type of customer or a business that brings with it social media expertise. Frasers is certainly not afraid to try new opportunities.
“Innovating and moving with the times has enabled the group to thrive, and that’s something which many retailers are too afraid to do when times are tough.”
