How shoppers buy, and retailers sell, at the peak Christmas retail season, says a lot about how they trade through the year, and their strategic approaches to selling online and across channels. What do the latest trading figures out today say for retailers’ trading strategies online and across channels? We’ve taken a look…
Boohoo.com Top100
Result: Total sales up by 52% in the four months to December 31 on constant exchange rates (55% up when fluctuations are taken into account). That includes a rise of 188% in the US, 54% in Europe outside the UK, and of 31% in the UK. Gross margins of 53.1% are down, with retail gross margins of 54.4% down as a result of investment to cut prices and in promotions. 5.1m active customers, 31% up on the same time last year.
Strategy: The fast fashion pureplay says it has focused on price, promotions and on expanding the range. A “strong customer proposition” over Black Friday helped to boost sales.
Boohoo is now investing in extending its Burnley warehouse further, and in its IT infrastructure. The US website moved to a new platform in October, and its UK and international apps are all becoming more popular. The company has also acquired to expand, buying PrettyLittleThing and is in the process of bidding for the assets of Nasty Gal.
What they say: Joint chief executives Mahmud Kamani and Carol Kane said: “As a result of the strong trading through Black Friday continuing into the Christmas season, we now expect revenue growth for boohoo.com (excluding PrettyLittleThing) to be between 43% and 45% in the year to 28 February 2017, above previous guidance of between 38% and 42%.”
Majestic Wine
Top100
Result: Group sales up by 15.3% in the 10 weeks to January 2, year-on-year. Majestic Retail sales up by 7.5%; 0.5% of that growth put down to the transfer of sales from closed stores and thus one-off. Naked Wines sales rose by 29.9%, and the Lay & Wheeler brand saw sales rise by 62.3%, although commercial sales fell by 0.8%. Some 30% of the group’s annual sales take place during the Christmas trading period.
Strategy: Multichannel retailer Majestic Wines says that its transformation plan is paying off, and that it was better prepared for Christmas than ever.
What they say: Chief executive Rowan Gormley said: “Delivering strong like for likes in a tough market is a tribute to the hard work that our people put in – right across the business.”
He added: “Our transformation plan is working and we remain on track to achieve our £500m sales goal. We said that we would be better prepared for Christmas than ever – and the numbers show that we did what we said we would do.
“At this stage we are not predicting a change to long-term margin expectations, but we need to retain flexibility to compete in a competitive market.”
