Restructuring helps Shop Direct cut losses

SHOP Direct, the Liverpool-based home shopping giant which owns brands such as Littlewoods and Woolworths, has narrowed its losses following a major reorganisation.

Figures published by the group show it made a pre-tax loss of £21m in the year to April 30, down from £114m last time.

Sales were flat at £1.7bn but earning before interest, tax, depreciation and amortisation (EBITDA) jumped 38% to £132m.

The group has been making the switch from selling through catalogues to online retailing. Online sales rose by 19% during the year and now make up 70% of all goods sold.

Sales were supported by the launch of new retail brands, such as Woolworths.co.uk, and the expansion of a portfolio of fashion brands, including Superdry.

Shop Direct, owned by Sir David and Sir Frederick Barclay, said earnings growth had been underpinned by greater operational efficiency, a reduced cost base and lower debts.

In January the group announced the closure of three call centres – in Burnley, Sunderland and Newtown, Wales – with the loss of 1,500 jobs. The group now employs 9,500 staff.

Group chief executive Mark Newton-Jones said: “This is a strong performance given the challenging economic conditions that have prevailed throughout the year. Today the group is a multi-brand, multi-channel business selling a huge range of products that cater for all customers across many demographic groups in every postcode.

“In the year ahead Shop Direct Group expects to deliver profit growth through continued improvements to our product ranges supported by further operational efficiencies. We are investing in a multi-million pound advertising campaign to further increase awareness of our retail brands. In the current environment we naturally remain cautious on outlook but feel we are uniquely positioned for future growth.”

Figures published by the group show it made a pre-tax loss of £21m in the year to April 30, down from £114m last time.

Sales were flat at £1.7bn but earning before interest, tax, depreciation and amortisation (EBITDA) jumped 38% to £132m.

The group has been making the switch from selling through catalogues to online retailing. Online sales rose by 19% during the year and now make up 70% of all goods sold.

Sales were supported by the launch of new retail brands, such as Woolworths.co.uk, and the expansion of a portfolio of fashion brands, including Superdry.

Shop Direct, owned by Sir David and Sir Frederick Barclay, said earnings growth had been underpinned by greater operational efficiency, a reduced cost base and lower debts.

In January the group announced the closure of three call centres – in Burnley, Sunderland and Newtown, Wales – with the loss of 1,500 jobs. The group now employs 9,500 staff.

Group chief executive Mark Newton-Jones said: “This is a strong performance given the challenging economic conditions that have prevailed throughout the year. Today the group is a multi-brand, multi-channel business selling a huge range of products that cater for all customers across many demographic groups in every postcode.

“In the year ahead Shop Direct Group expects to deliver profit growth through continued improvements to our product ranges supported by further operational efficiencies. We are investing in a multi-million pound advertising campaign to further increase awareness of our retail brands. In the current environment we naturally remain cautious on outlook but feel we are uniquely positioned for future growth.”