Very.co.uk and m-commerce boost profits at Shop Direct

Shop Direct, the UK’s leading multi-brand online retailer, with digital department stores including Very.co.uk and Littlewoods.com, announces its full year results for the 12 months to 30th June 2014.

STRONG FINANCIAL PERFORMANCE
• Group sales up 3% to £1.74bn (2012/13: £1.69bn)
o Very.co.uk delivered sales growth of 23.1% and is now the biggest brand in the group at more than £700m in sales
o Profitably managed sales decline within heritage brands Littlewoods.com and KandCo.com of 7.6%
• EBITDA growth of 24% to £164.8m (2012/13: £132.5m)
• PBT growth of 512% to £40.4m (2012/13: £6.6m)
• **Profit before tax and amortisation more than doubled to £64.6m (2012/13: £30.8m)

CONTINUED RAPID DIGITAL PROGRESS
• 84% of sales completed online during the year (2012/13: 78%) – up to 86% for Q1 2014/15
• 44% of all online sales made on mobile devices (2012/13: 27%) – up to 52% for Q1 2014/15
• More than half (54%) of customers now browse and shop across more than one device, with a fifth using a three-way combination of desktop, tablet and mobile
• Average daily visits to our six department store websites up 19% to 950,000 (2012/13: 800,000)
• First Black Friday promotion generated highest ever daily orders for Very.co.uk, with 10,000 orders placed during busiest hour

STRATEGY STARTING TO DELIVER
Offering greater choice for customers
• 911 famous brands now on offer, with household names such as River Island, Sonos and Radley brought on board during the year
• Announced launch of new accessible and high street luxury etail brand, Very Exclusive, bringing a further 150 high end brand names into the group over the next 12 months, including the likes of Marc by Marc Jacobs, McQ, See by Chloe, Vivienne Westwood Anglomania and Karl Lagerfeld, and making us the UK’s number one shopping destination for famous brands
• Electrical and seasonal continued as our strongest growth categories, driven by sales of TVs, white goods and gaming consoles and the continued expansion of our beauty offering
Developing an easier customer experience
• Significant investment made in data analytics capability, including funnel analytics and customer lifetime value modelling, in advance of next phase of personalisation programme
• Experimentation at scale brought to the business, with up to 50 tests per month now live on our sites and roadmap in place to increase to 140 tests per month in 2016
• Became first UK retailer to open an in-house user experience lab, enabling us to bring customers into the business to test ideas, website changes and new technologies in person
• SAS selected as decision engine partner to drive real time, on-site personalisation during this financial year, with initiatives including personalised homepages and top navigation already delivered
• Largest ever single project completed to move our websites onto Oracle’s more stable and flexible ATG10 platform in the cloud
Making life more affordable for customers
• Announced partnership with Zapp, enabling customers to make secure mobile payments
• Callcredit appointed as second credit reference agency alongside Equifax, enabling increased acceptance rates and a reduction in risk
• Flexible essential contents insurance product launched, allowing customers to select just a handful of specific items to cover

COMMENTING ON THE RESULTS, ALEX BALDOCK, GROUP CEO, SAID:
“These are strong results, driven by the outstanding growth of Very.co.uk and the unrelenting boom in m-commerce. Mobile continues to be a game changer for us, with more than half of our online sales now from smartphones and tablets.

“It’s clear that our strategy is working and we’ve made some big strides toward building a world class digital retailer. But we’re nowhere near the full potential of this business, there’s a ton more to do, and we’ll continue to invest heavily to get it done.

“Looking ahead, we’re excited to have announced the launch of our new luxury etail brand, Very Exclusive, which will take place during London Fashion Week in February 2015. In the meantime, our focus is on delivering another great Christmas for our millions of customers against what remains a tough economic backdrop.”

TOP TEN CHRISTMAS GIFT PREDICTIONS
1. PlayStation 4 and Xbox One
2. Onesies
3. Faux fur
4. Disney Frozen ice skating dolls
5. iPad Mini 3
6. GHD stylers
7. Samsung Galaxy Tab 3 Kids
8. BaByliss Curl Secret
9. Teksta Robotic Puppy
10. Lynx gift sets

**In 2015/16, Shop Direct will switch to full International Financial Reporting Standards (IFRS), under which amortisation will no longer be charged

ENDS

CONTACT INFORMATION
Shop Direct   James Evans   07826 522933
Lauren Young   07919 228622

Brunswick   Simon Sporborg   0207 396 7442
Helen Smith   0207 936 7419

ABOUT SHOP DIRECT
Shop Direct is the UK’s fourth largest online retailer, with annual sales of more than £1.7 billion. Our digital department store brands include Very.co.uk, which is now a £700 million brand, and receive an average of 950,000 website visits every day.

We exist to make good things easily accessible to more people. With our department store range, market-leading ecommerce and technology capabilities and unique financial services offer, we’re well placed to deliver on that promise.

We sell over 900 famous brands, including big name labels and our own exclusive brands, and deliver 48 million products to our four million customers every year. Our click and collect service, Collect+, delivers to more than 5,500 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.