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Jun 19, 2020
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Studio Retail's lockdown sales rise, cuts debt levels

Published
Jun 19, 2020

Value retailer Studio Retail Group had plenty to talk about on Friday as it announced ongoing strong sales during the lockdown and a reduction in its debt level compared to March, a feat few retailers have achieved during the coronavirus crisis. The company said that product sales over the first 11 weeks of its new financial year rose 55%.


StudioRetail/Studio.co.uk



The company sells a wide variety of general merchandise online, as well as fashion, jewellery and beauty, and said it saw particularly strong demand for ranges such as toys, games, electricals, fitness and garden.

During this period, we have been encouraged by the increased numbers of new customers, alongside good levels of repeat shopping from our established base,” it explained. “As a result, we have seen an increase in the number of active customers, measured on a rolling 12-month basis, to 2 million. We have reduced the level of marketing spend, whilst focusing the majority of our marketing activity since lockdown on digital and TV channels, which has proved effective, with traffic to the Studio website and new app being well ahead of prior year.”

During the lockdown, the company has controlled its inventory carefully, reducing our in-season stock holdings ahead of the resumption of UK high-street shopping this week, particularly for clothing and garden furniture. This has been achieved with a relatively limited impact upon margin rates and a negligible impact on the March 2020 stock provision”.

Meanwhile, the firm said that it has reduced its net debt as of June 12 and it now stands at £30 million, down from £52.3 million at the end of March.

This is due to the ongoing strong trading at Studio and its continued cautious approach to discretionary expenditure and stock intake.  At present, the group has sufficient liquidity for its near-term requirements without needing to use government funding schemes. 

CEO Phil Maudsley said:Studio's multi-year transformation to become a digital value retailer means we have been well-placed to adapt to the current environment. The response to the lockdown has been exceptional, not only with our strong trading performance and relevance to customers' needs, but also via our internal agility in responding to the operational challenges presented by Covid-19.  

I have been particularly pleased by the number of new customers we have welcomed to Studio in recent weeks. Customers who have never shopped with us before have been impressed by the choice, value, and service we have to offer. Whilst we will face increased competition from the high street over the coming months, we are confident that the strength of our offer will continue to resonate amongst value-conscious shoppers.

The overall market does remain volatile, and we are cautious about the risks to customer incomes for the remainder of the year. However, we have positioned ourselves strongly to manage these risks, and longer term, we are well-positioned to respond to any permanent shifts in online consumer behaviour.”

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