House of Fraser has delivered a healthy uplift in sales and profits, as the changes made by its new management team bear fruit despite tough trading conditions on the high street.

The 61-department store chain, which was acquired by a consortium led by the Icelandic investment group Baugur in November 2006, delivered total sales up 2.9 per cent for the 26 weeks to 26 July.

The figures suggest House of Fraser is holding its own on the high street, against rivals such as Selfridges and John Lewis, but it did not provide like-for-like sales, based on stores more than a year old, and its sales were boosted by two stores opening in Belfast and High Wycombe in March. House of Fraser said that its underlying earnings (Ebitda) were up by more than 30 per cent in the past 12 months.

Robert Clark, a senior partner at the market research firm Retail Knowledge Bank, said: “I suspect it masks a small fall in like-for-like sales. But the profit figure is reasonable and this shows they are watching costs very carefully.”

House of Fraser said the uplift in profits and sales had been driven by refurbished stores, improved stock management, the introduction of new products and high-margin private-label products, including its Linea line, which has been extended into handbags, accessories and home. It said it had reduced stock levels by 5 per cent and cut back on poor-selling stock significantly. House of Fraser said that sales at its 13 refurbished stores are 8 per cent ahead of the rest of the chain.

Don McCarthy, House of Fraser’s chairman, said: “Our three-year investment programme is well under way, and we are delighted by the performance of our new stores which were opened earlier this year in both Belfast and High Wycombe.”

House of Fraser, whose chief executive is John King, said it had invested £150m in the business since it was bought by Highland Acquisitions in November 2006 and that it had repaid or cancelled £110m of the original debt since then.

The department store chain, which generates annual sales in excess of £1.25bn, is to open two more stores in Bristol next month and London’s White City in October.

News reported by The Independent

The majority of shareholders in Bradford & Bingley have rejected the chance to participate in the group’s tortuous rights issue, picking up only 28 per cent of the £400m offer, as the clock starts ticking for the underwriters to offload the rest.

The news came on the day that B&B confirmed that Richard Pym, former head of Alliance & Leicester, is to take over as chief executive, a move that has been welcomed by the City.

B&B yesterday announced that shareholders had picked up just over 230 million, or 27.8 per cent, of the shares issued via the rights issue launched last month. The take-up of the offer, which closed at 11am on Friday, is ahead of the 20 per cent predicted last week.

A spokeswoman for the bank said the management was happy to have concluded the process and that the group was “on the road” to recovery. “It has been a tough process but we got there in the end,” she added. Bruce Packard, an analyst at Pali International, added: “It could have been worse.”

The take-up of shares does not affect B&B, as the issue was fully underwritten, guaranteeing it the full sum. The underwriters Citigroup and UBS will now start looking for subscribers for the remaining 597 million shares or face buying the shares themselves. The deadline for syndicating is 3.30pm on Friday.

The two powerhouse banks, whose fees amount to 10 per cent of the total issue, will not take the full hit as they have already called in UK banks and leading B&B shareholders to act as sub-underwriters. The sub-underwriters comprise Abbey, HBOS, Barclays, Royal Bank of Scotland, Lloyds TSB and HSBC, which between them could be left with a fifth of the increased share base.

B&B remains one of the most shorted stocks in the market, with 51 million shares out on loan, according to Data Explorers. It is possible that – as with HBOS’s rights issue – some of the underwriters could be selling the stock short. The move, which benefits from the share price falling, provides a hedge against being left with the rump of the unsold stock on an underwriter’s books.

The lead investors Legal & General, Standard Life, M&G and Insight are understood to have taken their full allocation of 14 per cent.

One source close to the process said that some of the retail investors did pick up shares, despite predictions that few of the 950,000 would buy in at the levels seen last week.

Fears for the success of the issue grew last Wednesday, as B&B’s shares fell below the 55p per share rights price, but B&B directors will be happy that the take-up did not go as badly as the process at HBOS, where only 8.29 per cent of investors exercised their rights. In contrast, close to 95 per cent of shares were taken up in RBS’s rights issue earlier this year.

One banking source said the feeling was one of relief that the process was over. It has been long and tortuous, with the issue failing twice before they finally got it away. Questions remain over B&B’s future, with some suggesting it could be a takeover target.

Shares in B&B closed at 54p, down 0.75p, yesterday.

News reported by The Independent