Department store House of Fraser has admitted that it is facing a ‘challenging’ market after failing to make any growth in the face of a lack of consumer confidence, according to its latest trading report.

Figures show that sales were flat at £573.3 million in the 26 weeks to 30th July, although gross profit did increase £2.5 million to £207.2 million.

Other figures show that the company’s EBITDA dropped by £1 million, which was driven by a £3.9 million decrease in its financial service income. However, online sales rose 17.8%, which accounted for 20.7% of overall sales.

The company has said that with a new store opening in Northamptonshire next summer and five stores refurbishments to finish at the end of October, HOF is looking to maximise sales in the fourth quarter which will include holiday season and Black Friday which account for 85% of the company’s annual profit.

Frank Slevin, executive chairman, said: “The UK retail sector is facing significant change in structural dynamics as consumers shopping habits and delivery expectations continue to evolve.

“Under the leadership of our strengthened management team we are, however, highly confident in our ability to navigate these changes and position House of Fraser to deliver on our customers’ demands.”