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From Dixons Carphone to Gear4Music and Quiz: what IRUK Top500 retailers said about their strategies this week

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Dixons Carphone sales move further online

Dixons Carphone said that more than 20% of its sales took place online over the first part of the summer. The retailer, which trades as Currys PC World and as Carphone Warehouse, both Leading retailers in IRUK Top500 research, said in a trading update that ecommerce revenues grew by 13% during the 13 weeks to July 28. At the same time, 21.4% of sales were completed online – up by 2.6 percentage points since the same time last year.

It also said that like-for-like (LFL) sales of electricals were flat over the period, compared to the same time last year. While consumer electronics sales grew during the World Cup, that was offset by a “softer” white goods and computing market. LFL sales of mobiles were down by 1%. Overall, however, it said that expectations for full-year pre-tax profits were still steady at around £300m. 

Chief executive Alex Baldock said: “We’ve made good progress in setting a clear long-term direction for the business one that sharpens our focus on the core and that better joins up both our offer to customers and our business behind the scenes.”

Quiz set to write off House of Fraser losses

Quiz this week said it was expecting to write off £0.4m as a result of House of Fraser’s adminstration.

The fast fashion retailer, a Top150 business in IRUK Top500 research, operated 11 concessions within the department store and sold its products through its website. New owner Sports Direct bought House of Fraser out of administration but is not obliged to pay debts owed before that administration.

Quiz says it now expects to provide £0.4m in its accounts against amounts it is owed as a result.

The update came in an AGM trading statement on its year to date in which Quiz also said its focus was on making the most of its online potential. To that end it is investing in the ongoing development of its websites and apps. It said it was now seeing stronger growth through its own websites, rather than through third-party sites. Last year third-party partnerships with Zalando and Next led to “exceptional growth” through that channel.

Quiz also says it is well placed for the future. “Despite an uncertain trading environment we believe that the group, underpinned by the strength of the Quiz brand as well as its flexible omnichannel model, remains well positioned for continued strong growth.”

Gear4Music sales rise, but increased competition squeezes profits

Pureplay Gear4Music, a Top250 retailer in IRUK Top500 research, on Friday reported a 36% rise in sales, to £42.5m in the six months to August 31, compared to the same time last year. In a trading update it said that UK sales of £24m were 34% up on last time, while European sales of £18.5m were 39% ahead. But it said that competitive pressures were starting to build in its sector.

The growth has come as active customer order numbers grew by 40% to 547,000 and its European operations continued to expand. Its German distribution centre fulfilled 230% more orders than at the same time last year, while its new Swedish centre is set to be up and running by the end of October.

Andrew Wass, chief executive, said overall sales were ahead of expectations. “Our core UK market continues to perform well and with the UK distribution centre upgrades we announced in May progressing to plan, we are well positioned to deliver further strong sales growth during the busier second half of the year.

“While still strong, European sales growth reflects a slower than anticipated build-up of inventory at our European distribution hubs, particularly in Sweden.” He said that the opening of the new Swedish centre, along with the expansion of its European team, would mean the range and depth of inventory would increase ahead of peak season. “We expect European sales growth will accelerate during the second half of the year,” he said.

He said competitive pressures were increasing and hitting short-term profit margins as a result. “At this stage in our growth cycle we remain focused on best serving our customers, and see opportunities to rapidly increase our market share as the industry continues to consolidate and shift from traditional retail to agile ecommerce.” He said strong sales growth should compensate for lower profit margins, and that the board expected year-end earnings to meet expectations.

Image: InternetRetailing Media

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