House of Fraser - Financial Report



House of Fraser - Financial Report

Introduction of the Company

House of Fraser is a retailer of designer brands in the United Kingdom. Through its subsidiaries, Co. is engaged in department store operations; the provision of card handling services; and investment holding.

House of Fraser is Britain's leading retailer of designer brands. It operates a chain of 50 stores in the United Kingdom. Its product range consists of clothing, footwear, furnishing and food. Some famous brands that the Group is trading include Gucci, Dolce & Gabbana, Armani. House of Fraser is quoted to the FTSE with a current market capitalization of 234.80 million. The groups strategy focuses on a) people development b) new store opening program c) develop brand d) reposition the home office e) information technology development f) supply chain g) cost saving.

Market Position In Relation To Six Competitors

According to the market share graph of the UK departmental stores, we can see that Marks & Spencer enjoys the largest market share having 36.9% of the total market. John Lewis stands second in the lane with 21% share of the total market. Debenhams control 12.4%, whereas House of Fraser controls 5.6% of the total market share. After that, Harrods and Selfridges exist in the market with 4.5% and 3.6% respectively. Rest of the stores exists in the market with low market shares.

Financial Analysis

Financial Performance in relation to competitors

Comparing debt to equity of the five companies

Lowest ratio: Arcadia Group

Highest : House of Fraser

High debt to equity ratio: avoid the cost of issuing shares and do not want ownership in many hands

Low debt to equity ratio: keep the cost of debt low and finance their needs through equity

House of Frasers: receivables turnover and inventory turnover: low

Receivables collected in less days as compared to competitors

Financial performance: overall good and competitive to major competitors

Still room for improvement for further efficiency

Factors of the External Business Environment

While it is obvious that the most successful organizations have always been the most flexible and adaptable, which is new in the current situation is the diversity, pace and the interrelationship of the changes. Today they have the same importance, changes in social values in government regulations and developments in formulas for energy and the economy. The organization depends on the external environment, not only for their inputs but also for the acceptance of their products. The adjustment means for the organization to adapt to environmental demands are the channels of information (Terry & Phillips, 2008).

These channels are integrated into a structure of individuals, teams, tools and data. The environmental analysis is an essential and integral part of the planning process is one of the starting points, since it provides the contextual framework. A business strategy that meets the changing environmental conditions should be a business-wide strategy should include marketing strategies, technology, human resources, finance, public relations and government relations. The environmental analysis is an essential and integral part of the planning process is one of the starting points, since it provides the ...