Strategy to build cross-channel ‘world-class’ retailer boosts Shop Direct profits by 512%

Shop Direct today said its strategy of building a world-class digital retailer where customers can shop affordably and across devices was paying off, as it reported 512% growth in pre-tax profits.

But group chief executive Alex Baldock said the company still had a ‘ton more’ to do.

“These are strong results, driven by the outstanding growth of Very.co.uk and the unrelenting boom in m-commerce,” he said. “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.”

The home shopping company, which also owns brands including Littlewoods.com, today reported 3% growth in group sales, to £1.74bn in the year to June 30, while pre-tax profits grew to £40.4m from £6.6m at the same time last year. At Very.co.uk, sales grew by 23.1% to more than £700m, becoming the group’s biggest brand.

Shop Direct said 84% of sales were completed online during the year, while 44% of online sales were made over a mobile device. Some 54% of customers browsed and shopped across more than one device, and a fifth used three devices: desktop, tablet and mobile.

It said a strategy that included offering customers greater choice, through more than 900 brands, developing an easier customer experience, through measures including widespread testing, improved personalisation and data analytics, and the opening of an in-house user experience lab, and the movement of its websites onto Oracle’s ATG10 platform, and making life more affordable through measures including the introduction of a new credit reference agency.

The company also said luxury etail brand Very Exclusive would be launched in February’s London Fashion Week.