Operating profits at South-African owned footwear retailer Office dropped 41%, after the firm was left out of pocket by the collapse of House of Fraser as “tough trading conditions” and increased discounting hit its bottom line.
The Truworths-owned retailer reported an operating profit of £15.3 millon, down from £25.9 million the previous year. The EBITDA fell by 35% to £21 million as a result of the “tough trading conditions”, and gross margin fell to 44.4% from 46% the previous year, due to an “increase in markdown sales”.
However, the retailer maintains that it is “a well-funded and cash-generative business and, as such, intends to continue the expansion of its integrated multichannel businesses.”
It added: “The board remains confident that the Office group is in a strong position to continue to grow and invest for the future.”
At the time of the report, Office was trading from 116 stores and 40 concessions, primarily in the UK, Ireland and Germany. Its concessions are with House of Fraser, Selfridges, Arcadia and Brown Thomas.
Along with many other retailers, Office suffered when House of Fraser fell into administration in August 2018. The department store owed the footwear retailer almost £700,000, which is not expected to be repaid.