The owner of Sports Direct and Flannels has said sales have fallen at its UK retail businesses amid heavy discounting by rivals and “very subdued” consumer confidence.
Frasers, which is controlled by the former Newcastle United owner Mike Ashley, said sales at its UK sports division were down 5.8% in the six months to 26 October to £1.3bn despite growth at the main Sports Direct chain because of “planned decline” at its Game outlets and the Studio Retail online arm.
Michael Murray, the 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 subdued”.
His comments come as analysts at the advisory firm BDO said Black Friday had “failed to drive any meaningful sales growth for retailers” as they were forced to discount heavily 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% in November, if the effect of new store openings and closures was excluded, with in-store sales contributing just 1.3% growth.
Sophie Michael, the head of retail and wholesale at BDO, said: “Black Friday failed to drive any meaningful sales growth for retailers or get shoppers spending in stores in November.
“Sales on the high street registered minimal growth, and while online sales performed better, retailers discounted heavily throughout November to generate these sales, which will have put further pressure on their margins.”
She said a fall in consumer confidence and the wider economic conditions were “unlikely to have encouraged many shoppers to go out and spend” on non-essentials.
“While retailers may have thought that consumers were holding back until the budget, which was unhelpfully late in the ‘golden quarter’, the expected surge in Black Friday discretionary spending just hasn’t materialised,” Michael said.
Frasers Group said it remained cautious about the second half of its financial year but still expected to meet full-year profit expectations of up to £600m, after its bottom line was boosted by a big increase in the value of its investment in the Hugo Boss brand.
Sales fell by 3.7% at its premium division as it said it had closed more House of Fraser, Jack Wills stores and outlets relating to a string of brands it bought from JD Sports in 2022 including Liam Gallagher’s Pretty Green and 1980s brand Tessuti.
Total sales for the group rose 5% to £2.6bn in the half year, after strong growth internationally where the group has snapped up a number of new businesses, and pre-tax profits almost doubled to £412m largely as a result of the increased value of the Hugo Boss stake. Operating profits increased 18% to £219.8m.
Frasers said: “Trading has improved compared to last year’s budget-affected period; it is still weaker than [the year to April 2024], with excess inventory in the sector continuing to weigh on the wider market.” .
Murray said: “We’ve made a solid start to [the year to April 2026] even though market conditions are tough, consumer confidence is very subdued and excess inventory continues to weigh on the industry, leading to increased promotional activity. While we remain cautious into the second half, our focus is unwavering as we confront these challenges head-on.”
