08 Oct 2020
Posted in Retail
Strong online capability and multi-category offer helps Very.co.uk to thrive through COVID-19
Following today’s release of The Very Group FY figures for 2019/20, Alex Hardy, Retail Analyst at GlobalData, a leading data and analytics company, comments:
“A broad category offering has been integral to online pureplay The Very Group’s strong performance throughout the COVID-19 pandemic, with consumer preferences transforming almost overnight in the face of a changing environment, helping the retailer to generate a profit before tax for the first time in three years. Very.co.uk’s retail sales increased 10.5% compared to last year, primarily driven by an excellent Q4, in which sales soared by 36%, due to the provision of categories that have prospered during the lockdown. These have performed best for the group, with sales of electrical and home categories up 64% and 40% respectively in Q4. Fashion saw reduced demand due to the pandemic, in line with other retailers including H&M, although annual sportswear growth of 14.2% helped to offset the fall. This wide product range has enabled Very.co.uk to consistently cater to consumers’ varying tastes and achieve success through challenging times.
“The opening of a new fulfilment centre, ‘Skygate’, on the day the UK went into lockdown, proved good timing for The Very Group, as it was well-placed to accommodate the channel shift towards online purchasing during the COVID-19 pandemic. The automated warehousing space has allowed for faster processing of orders and returns, on a greater scale, meaning the retailer has become a reliable and attractive option for consumers.
“The Very Group’s credit proposition helped to drive customer growth of 10.6% in the year, with new credit customers up by over 80.9% in the final quarter, as flexible payment options appealed to consumers during a time of economic uncertainty. With shoppers purchasing big ticket items such as home office equipment and garden furniture, the ability to delay payment or pay in instalments has proved invaluable. If the recent uptick in adopters proves to be sticky, the retailer can look forward to a sustained rise in sales.
“While The Very Group was well-positioned to flourish during lockdown, measures such as cost reduction, inventory control and tight management of capital spend have helped EBITDA reach £264.4m. This is only a slight decline on last year, despite reduced financial services margins, suppressed demand for higher margin fashion items, and COVID-19 impacts. The group continued to manage the decline of Littlewoods.com, with sales falling 8.8%, with the fascia gradually becoming a small part of the business allowing it to focus on the flagship Very.co.uk brand. The outlook remains positive moving forward, with Q1 FY2020/21 retail sales experiencing double-digit growth on last year, due to continued demand for electricals and home.”