Shop Direct outperforms over Christmas, Very sees near-17% sales surge
UK e-tail giant Shop Direct had a strong Christmas period with revenue in the seven weeks to December 22 rising a healthy 6.3%, it said Tuesday. That was driven by its Very brand, which saw a 16.8% sales surge.
Very is the largest of the firm’s three brands, which also include the higher-end Veryexclusive and the legacy business Littlewoods. And Very is also its fastest-growing brand, a status cemented by that impressive Christmas performance.
The company also said that its ongoing increase in mobile sales continued, with 73% of online sales now coming from mobile devices, up from 68% just a year earlier.
ShopDirect put itself up for sale last year then withdrew after it failed to achieve the premium price tag it wanted. And the trading update certainly underlines why it believed it was worth more than bidders were prepared to pay as many UK retailers saw much weaker figures in November and December.
There has been speculation that the failed sale process was behind the impending departure of CEO Alex Baldock who, the company confirmed on Tuesday, will leave this month. He’s been hugely successful in driving sales upwards at the firm and these figures show that his initiatives are still paying off.
Shop Direct also said that finance chief Derek Harding is stepping in as interim CEO and Harding certainly has a buoyant company to run, despite the tough UK retail backdrop.
The firm said that the 16.8% increase at Very over the seven weeks easily outstripped the 7% growth in the UK non-food retail market. And Shop Direct clearly sees Very as its future with the group currently engaged in a “profitable, managed decline for the [Littlewoods] brand”. That managed decline saw Littlewoods’ sales falling 12.6% over Christmas.
But that was the only blot on an otherwise-impeccable trading update. Overall, the group saw 102 million site visits, a 5% rise, with total mobile sales up 18% and another record-breaking Black Friday, with retail sales rising 10.9% from November 13 to 28.
But while fashion is a key part of the business, this Christmas, it wasn’t the standout category with the biggest growth being seen in electricals. That category’s growth included a 45% rise in gaming sales, 37% in smart tech and 31% in mobile phones.
However, fashion and beauty did get a look-in as far as the top 10 products were concerned with Converse Chuck Taylor All Star Ox trainers and Calvin Klein Eternity Moment fragrance both on the list.
The performance improvement came after the firm has invested heavily in upgrading its tech. New product recommendations have been added to make it easier for customers to find and buy what they want. And easier-to-navigate product pages and the flexibility to update the sites fast during key trading days such as Black Friday have all been designed to ensure a seamless process for shoppers.
That certainly fed through to better technical performance with the company reporting no outages or site slowdowns over the Christmas trading period, even during Black Friday’s busiest times.
The company also said that it delivered 7.1 million parcels via Yodel, Arrow XL and Royal Mail and that 28% of parcels were delivered to CollectPlus hubs – an 8% year-on-year increase in click-and-collect.
Current CEO Baldock hailed the results that came after 9% growth last year and 6% the year before, while his replacement Harding said that “Shop Direct has achieved one of retail’s most successful transformations over the last five years,” promising more to come in the next five years.
He said the “market remains tough and highly promotional,” but “we’ll keep trading hard and investing in what makes us special to deliver another positive year.”
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