Strong Christmas trading for Shop Direct in challenging market

Shop Direct, which operates multi-category digital retailers Very.co.uk and Littlewoods.com, increased group revenue by 3.7% year-on-year for the seven weeks up to and including 28 December 2018. The group’s performance was driven by 8.8% year-on-year growth at Very, its largest and fastest growing retail brand.

Trading highlights

  • Revenue at Very up 8.8% year-on-year
  • Revenue growth across the group achieved whilst maintaining retail margin rate in line with last year
  • Year-on-year revenue growth across all four group product categories – clothing and footwear, electrical, seasonal, and furniture and homeware
  • Strong, positive revenue performance across the seven-week peak period, including an extended Black Friday promotional period
  • 107.3 million site visits, up 8% year-on-year
  • 79% of online sales coming from mobile devices, up from 74% during the same period in 2017
  • Total mobile sales up 12.7% year-on-year

Retail highlights

Clothing and footwear, and seasonal the star categories

  • Clothing and footwear was the standout product category, up 8.0% year-on-year at group level and 15.7% at Very. This performance was driven by sportswear, which grew 22.8% at group level and 33.0% at Very
  • Seasonal also performed strongly, growing 6.2% year-on-year at group level and 14.1% at Very. The category was buoyed by toys – a strategic focus for the business during the period – which was up 20.4% at group level and 33.0% at Very
  • Among the top sellers by units were:
    • L.O.L. Surprise! toys
    • The third generation Amazon Echo Dot
    • Video games Call of Duty: Black Ops 4, Red Dead Redemption 2 and FIFA 19
  • Among the top sellers by total sales were:
    • Games consoles, including Nintendo Switch and PS4 bundles
    • Apple’s iPhone X and 2018 iPad
    • Samsung Ultra HD 4K TVs

A longer, better Black Friday

  • Our earliest and longest Black Friday promotional period – 9 to 27 November 2018 compared to 13 to 28 November in 2017 – made Very.co.uk and Littlewoods.com among the first in the market to launch their campaigns
  • Very’s digital out-of-home advertising campaign, featuring dynamic sales messaging in high street locations, provided shoppers with real-time information about online pricing, stock availability and demand for offers

An improved customer experience

  • Integrated IBM Watson’s artificial intelligence technology with our in-app chatbot Very Assistant, allowing customers to ask account related questions in their own words and receive answers from the Assistant
  • Developed a Facebook Messenger chatbot, which was built in-house to support the Very Christmas brand campaign. The Very chatbot, which has been highlighted as ‘best in class’ by Facebook for its in-house execution, helped customers choose thoughtful gifts for children and drove social media engagement
  • Improved customer service and online self-service options helped Shop Direct to reduce customer calls into the contact centres by 30%

Operational highlights

  • Delivered 6.8 million parcels via delivery partners Yodel, Arrow XL and Royal Mail, compared to 6.5 million in the same period last year
  • 25% of parcels were delivered via Collect Plus, our click and collect partner
  • Added new features to customer delivery information like ‘track the van’ capability, delivery countdown and driver contact details to help customers manage deliveries

Henry Birch, group CEO at Shop Direct, said:

“I am delighted that against a challenging retail backdrop we delivered a record Christmas period in terms of total revenue whilst maintaining retail margin rate in line with last year. I’m very proud of what the team’s achieved.

“Throughout our peak trading period we focused on delivering a great customer experience and curating the right deals for our customers and our business during our extended Black Friday event. We put more emphasis on December than ever before and saw encouraging growth in key departments like sportswear and toys.

“Looking ahead to 2019, we’ll focus on continuing to play an important role in the lives of our customers – those who value our unique combination of leading brands and the flexibility to spread the cost of purchases. Given the potential impact of the political backdrop on consumer spending, we expect the year will be challenging for retailers. However, our peak trading performance gives us reason for cautious optimism.”

ENDS

CONTACT INFORMATION

Media enquiries

Shop Direct

Lauren Young              07919 228622

Dave Lafferty               07552 283266

Brunswick     

Eilis Murphy                0207 404 5959

Cerith Evans                0207 404 5959

Bondholder enquiries 

Shop Direct                  David Fletcher             david.fletcher@shopdirect.com

ABOUT SHOP DIRECT

As the UK’s largest integrated pureplay digital retailer and financial services provider, Shop Direct has annual sales of £1.96 billion. Our brands are Very.co.uk, Littlewoods.com and LittlewoodsIreland.ie. We receive an average of more than 1.4 million website visits every day, with 74% of online sales completed on mobile devices.

We exist to make good things easily accessible to more people. With our multi-category range of famous brands, market-leading technology and data capabilities and unique financial services products offering flexible ways to pay, we’re well placed to deliver on that promise.

We sell more than 1,800 famous brands, including big name labels and our own exclusive brands. We have four million customers and deliver 49 million products every year. Our free click-and-collect service, CollectPlus, delivers to 7,000 stores across the country, increasing ease and convenience for customers.

For more information on Shop Direct, visit www.shopdirect.com or follow us on Twitter at @ShopDirect.