Online-only Very Group has seen full-year sales fall back as customers return to more normal patterns of spending from its previous record year as ecommerce spending peaked during pandemic lockdowns. But its profits rose as it reduced its costs despite the impact of inflation. Very Group has boosted the use of automation in logistics and customer service, while the brands it sells are starting to fulfil orders directly.
Retail sales at its flagship Very brand fell by 7.7% in its latest full-year, reflecting falling sales in categories that were popular during and immediately after Covid-19 lockdowns, from electricals (-12.7%) to homewares (-22.3%). But fashion and sports (+6%) saw a recovery, especially among high street (+87%) and designer (+50%) brands.
The retail group, which also owns Littlewoods, says it has continued to invest in technology and data in order to improve the customer experience, and it is now working with a growing number of brand partners that ship orders direct to the customer. The use of automation is growing in both its logistics and customer service departments. In August it launched an ‘everyday’ fashion and home range of more than 700 items, of which 85% are available for less than £30.
Full-year figures
The update comes as Very Group today reports group revenues of £2.1bn in the 52 weeks to July 2. That’s 7.3% down on the previous year. Within that, revenues at the Very brand, ranked Top100 in RXUK Top500 research, came in at £1.8bn, 4% down on last time. Very Finance revenues grew by 10.7% to £397.9m but Very retail sales fell by 7.7% to £1.4bn. Pre-tax profits of £63.9m were 2.2% up on last time as the retailer cut costs despite inflationary pressures.
Group revenues were 4.8% ahead of its pre-pandemic 2020 financial year, while Very revenue was 12.6% ahead.
Ben Fletcher, chief financial officer at The Very Group, says the “robust performance” is “driven by ongoing structural growth in the Very brand, our integrated business model – which continues to prove resilient as we adapt to changing customer behaviour – and, of course, our amazing people.”
Fletcher adds: “Throughout the year, we were there for millions of families who benefited from our combination of leading brands and flexible payment options, from the return of fashion for the whole family, to entertaining the kids, updating homes, and accessing the latest games consoles and TVs.
“We did that while investing in our digital customer experience, modernising our technology, strengthening our Very Pay platform and increasing our product assortment through stockless fulfilment.
“While the rising cost of living and other economic conditions present challenges for all retailers, we’re confident in our resilient and adaptable business model – which combines multicategory online retail with flexible ways to pay. We now turn our attention to delivering an amazing Christmas for the families we serve.”
Multichannel strategy
Very Group is moving towards a more flexible cloud-based architecture, through partnerships with commerce tools for its ecommerce platform, Amplience for its merchandising and content, and True Fit for personalised size and fit guidance.
It has begun a CRM (customer relationships management) transformation to improve the information that customer service advisers use and it is using advanced data analysis to support demand forecasting and, in turn, availability.
Its machine-learning Very Assistant answered an average of 344k chats a month, representing a 37.6% year-on-year increase.
Operations and logistics
The retail group launched supplier fulfilment of some orders from Adidas and Reebok and has since repeated this with six more brands, from Berghaus to Ann Summers. In doing so, it has improved its range and availability.
During the year its automated Skygate fulfilment centre processed orders in as little as 16 minutes, and on its busiest day – December 9 2021 – sent out 102k orders. The group took a more agile approach to sourcing, by shipping to ports in the north of the UK and then sending containers by rail to Skygate, in the East Midlands.
Sustainability
Very Group now uses renewable energy at all its sites, as part of an ambition of being carbon neutral in its own operations by 2025. It has now reduced its Scope 1 and Scope 2 carbon emissions by 40%. It has also started to work with Jeanologia to reduce the use of water and energy in making its own brand denim, and won a UN award for its work to empower women in India’s textile industry.
