‘Tough market conditions’ hit UK half-year retail sales at Frasers Group | Frasers Group

The owner of Sports Direct and Flannels has said sales have fallen at its UK retail businesses due to heavy discounting by rivals and “very weak” consumer confidence.

Frasers, controlled by former Newcastle United owner Mike Ashley, said sales at its UK sports division fell 5.8% in six months to £1.3bn on October 26 due to a “planned decline” in its Game outlets and Studio Retail online arm, despite growth at its main Sports Direct chain.

Michael Murray, chief executive of Frasers Group, which also owns House of Fraser stores, Jack Wills and dozens of other brands and numerous shopping centres, said “market conditions are difficult” and “consumer confidence is quite weak”.

His comments came as analysts at consultancy BDO said Black Friday “failed to deliver a meaningful sales boost for retailers” because they were forced to offer deep discounts to attract shoppers.

BDO’s regular survey of a group of mid-sized retailers, mostly fashion chains, found that sales rose 3.4% in November if the impact of new store openings and closures were excluded, with in-store sales contributing just 1.3% growth.

BDO retail and wholesale manager Sophie Michael said: “Black Friday failed to deliver a meaningful sales boost for retailers in November or get shoppers to spend in stores.

“Sales on the high street have seen minimal growth and while online sales have performed better, retailers have discounted heavily throughout November to accommodate these sales, which will put further pressure on their margins.”

He said the decline in consumer confidence and wider economic conditions were “unlikely to encourage many shoppers to go out and spend on essentials”.

“While retailers may have thought consumers were waiting until the late budget, which was unhelpful to the ‘golden quarter,’ the anticipated increase in Black Friday discretionary spending has yet to materialize,” Michael said.

Frasers Group said it was cautious about the second half of its financial year but still expects to meet profit expectations of up to £600 million for the full year after its profitability improved with a major increase in the value of its investment in the Hugo Boss brand.

Sales in the premium division fell 3.7% as it said it was closing more House of Fraser, Jack Wills stores and outlets on a number 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% in the half year to £2.6bn, following strong international growth in which the group acquired a number of new businesses, and pre-tax profits almost doubled to £412m, largely as a result of the rising value of Hugo Boss shares. Operating profit rose 18% to £219.8 million.

Frasers said: “Trading has improved compared to last year’s budget-impacted period – it is still weaker than before. [the year to April 2024]”Overstock in the sector continues to put pressure on the broader market.”

Murray said: “We’re off to a solid start [the year to April 2026] Although market conditions are challenging, consumer confidence is very weak and excess inventory continues to put pressure on the industry, leading to increased promotional activity. “While we remain cautious in the second half, our focus remains unchanged as we confront these challenges head on.”