Online shift proves Very profitable for Shop Direct

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The UK’s second biggest online retailer Shop Direct has delivered a third consecutive year of record profits following their decision in June to drop the fabled Littlewoods catalogue and focus on its digital operations.  Pre-tax profits to 30 June climbed 78% to £71.7m against £40.4m the previous year.

The figures are the result of a drastic and highly effective transformation by Shop Direct from a mail order catalogue retailer to an exclusively online seller.  Indeed just three years ago the Littlewoods catalogue, which once adorned coffee tables up and down the country, accounted for 72% of the group’s sales.  The focus these days is placed on the group’s two websites – Littlewoods.com and the booming Very.co.uk which is currently welcoming over 1 million users per day.

The group’s switch from tried and trusted legacy brands has been particularly ruthless, with Isme, Woolworths, and K&Co all going the same way as the catalogue and being subsumed into the Very or Littlewoods online businesses.  A diverse array of new brands are being continually signed up and sold across the group’s websites – this year’s new arrivals range from Miss Selfridge to Vivienne Westwood and thus aim to cover all demographics.

Another key to the success of Very.co.uk has been its mobile platform, which has catered highly effectively to the smartphone generation and now accounts for 59% of its sales.  This mobile proliferation has hastened the next step for the group of personalising the retail experience for customers on their devices.  Significant investments having been made in “big data” that will enable Shop Direct to identify offers that can be tailored uniquely to each customer.  In the wake of the recent TalkTalk scandal, we do hope in this regard that the investment will include measures to ensure the proper protection of the wealth of customer data the group intend to accumulate.

These concerns should not detract, however, from what has been an astonishing turn around by the group.  Shop Direct has demonstrated that a fearless and radical approach to change can pay off in style, especially in the current age of rapid technological advances that appear to be changing consumer habits on a regular basis.

If you are considering making changes to your business or require any advice or assistance on other Corporate and Restructuring matters please do not hesitate to contact me at jenny.burke@forbessolicitors.co.uk or on 0800 321 3258.

Jenny Burke

About Jenny Burke

Jenny Burke is a Solicitor within the Corporate & Restructuring department at Forbes Solicitors and assists business clients of all sizes from a range of sectors with transactional and advisory work. Jenny’s blogs cover her specialisms of mergers and acquisitions, corporate restructures and re-organisations and partnership and shareholders agreements.
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