Shop Direct profits surge to £71.7m
SHOP Direct, the UK’s second biggest online retailer, has announced its third consecutive year of record profits.
In the year ending June 30, profits surged up 78% to £71.7m, driven by sales growth and its move to becoming a 100% digital retailer and what the company describes as “better discipline across selling, costs and credit risk”.
The Liverpool-based company, which has digital stores Very.co.uk, Littlewoods.com and VeryExclusive.co.uk, has made some bold decisions, culling the catalogue and closing legacy brands Woolworths, K&Co and Isme.
It says becoming a “pureplay retailer” has given Shop Direct the freedom to invest in its digital transformation, while at the same time allowing it to return a profit for the third year in a row.
Group turnover increased 3% to £1.8bn (2014: £1.7bn) with Very.co.uk, a key driver with sales up 21% to £850m. with web traffic breaking the one million per day mark.
Very.co.uk now claims to be the UK’s fastest growing department store. Meanwhile, its mobile sales are 59% of total online sales, which is 17 points ahead of the market.
Although only three years ago 72% of its sales were from catalogue customers, production of catalogues has now ended after an era of more than 80 years.
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Group chief executive Alex Baldock said: “This has been a big year for Shop Direct. I’m especially pleased that in our third year running of record profits, we have also accelerated our digital transformation.
“Very.co.uk and mobile have been the outstanding performers for us.
“We’re working hard to keep our lead in m-commerce, and Very is now the UK’s fastest growing department store. This is now a disciplined business too, in the way we sell, spend and lend, which makes for a more profitable and resilient Shop Direct.
“We passed some important milestones last year. We called time on the catalogue, and we are now a pureplay retailer dedicated to digital. We’ve transformed quickly to this more focused business – only three years ago, nearly three-quarters of our sales were from catalogue customers.
“We’re also more focused on Very.co.uk and Littlewoods.com, made possible by the closure of our three smaller brands.
“Being online-only means more mobile innovation, especially in personalisation where we aim to offer each customer an experience as unique as she is.
“Four months in, we’ve made a strong start to the new financial year too. We’re in good shape for the peak Christmas period, and we expect growth, discipline and transformation to drive another record year.
“That said, we’re nowhere near the finished article and we’ve only scratched the surface of the full potential here. The competition is ferocious so we must and will continue to invest heavily in our digital future, and keep up the pace on our transformation. These are exciting times for Shop Direct.”
