Digital Transformation

Shop Direct's digital retail strategy helps it secure first pre-tax profit in a decade

By Stephen Lepitak | -

October 29, 2013 | 4 min read

Shop Direct, the company behind retailers such as Littlewoods.com, isme.com and Very.co.uk, has reported its first pre-tax profit in a decade as it revealed that its online sales grew to 78 per cent, as group sales rose by 1 per cent to £1.69bn.

The company’s year-end figures for 30 June were revealed to have seen online sales growth of 3 per cent from the previous year, with the first quarter of 2013/14 continuing to show an upsurge as it reached 81 per cent.

Over a quarter (27 per cent) of those online sales were made through mobile, up from a fifth (20 per cent) the previous year, while the first quarter of the latest year figures show mobile at 38 per cent of online sales, while the number catalogues distributed during last year more than halved to 4 million from 8.2 million in 2012.

As a result, Shop Direct reported a pre-tax profit of £6.6m, up from the loss of £57.7 million the year before, having reduced exceptional costs from £46.2m to £8.4m and achieved EBITDA growth of 22 per cent to £132,5m.

Alex Baldock, CEO, said that the results markets “an important milestone” for the group as it aimed to become “a world class digital retailer.”

He continued: “We’re delighted to report a positive pre-tax profit for the first time in 10 years, giving us a solid platform from which to move forward.

“Our newer brands, Very.co.uk and isme.com, have continued to outperform the market with combined double digit sales growth.

“Our digital progress also continues at pace, with online sales now exceeding 80% and almost two-fifths of those coming from mobile. Almost half of our customers now browse and shop our sites across multiple devices, with tablets in particular increasing in importance in the customer journey.

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“We have a new level of ambition and have set out a clearly defined and disciplined strategy for the continued evolution of Shop Direct, with world class personalisation at the heart. Our new corporate brand reflects this sharp focus and our confidence in the continued digital development of the business.

“We occupy a unique position in the UK’s digital retail market by making good things easily accessible to more people, and are proud of the part we play in our customers’ lives. Our attention and energy are now fully focused on delivering a great Christmas for our customers as we enter the busiest and most important trading period of the year," he concluded.

During the year, the retailer grew its Collect+ network to over 5,250 stores and delivered 25.9 million parcels.

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