Shop Direct increases full year sales and profit as mobile-first strategy pays off
Shop Direct, the owner of Very and Littlewoods, has grown its annual underlying pre-tax profit by 43.6% to £150.4 million in its first full financial year as a pureplay digital retailer.
The company, which ceased catalogue production in January 2015, also saw strong growth in sales which rose by 4.3% to £1.86 billion.
Alex Baldock, chief executive at Shop Direct, said: “We’re happy to report a fourth consecutive year of sales and profit growth. We’ve stayed focused on our strategy of bringing great products within reach of more people, and it’s working well for us.
“2016 was our first full year as a pureplay etailer. Removing the shackles of the catalogue has been liberating, and has allowed us to invest in the areas that matter most to our customers – making their shopping experience easier and more personalised, particularly on mobile.”
Shop Direct said the profit increase was driven by 15.9% sales growth at the group’s largest and fastest growing online department store Very.co.uk, where sales passed the £1 billion mark for the first time; expansion in mobile transactions, which now make up 62% of online sales; and continued cost discipline across the business.
The group also enjoyed a record-breaking festive period with sales up 6% year-on-year for the seven weeks to 25 December 2015. In addition, Black Friday on 27 November 2015 was its busiest trading day on record, with orders at Very.co.uk up 65% year-on-year.
Shop Direct said its mobile first approach was paying off with web traffic across the Shop Direct sites growing by 12% to reach 1.2 million visits per day on average during the year. Daily traffic from smartphones increased by 42% to more than 638,000 visits. Orders via smartphones rose by 46% on the previous year.
Baldock added: “This was the year our investments in technology really started to pay off. We’ve made big strides in m-commerce, big data and personalisation. But there’s a lot more to play for in these areas. In particular, we believe that artificial intelligence can change the game for us in data and personalisation. We’re deploying it already and are serious about going much further.
“We continue to gain market share profitably, and are on course for another record year of sales and profit. We’re confident that, if we stay true to our strategy and to what makes us special, we’ll continue to succeed.”
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