14 Aug 2020
Posted in Retail
Strong online capability and multi-category offer helps Very.co.uk to thrive through COVID-19
Following the release of The Very Group’s Q3 figures for FY2019/20, 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. Retail sales increased 36% in Q4 compared to last year, with website visits up 65%, due to the provision of categories that have prospered due to the lockdown. These have performed best for the group, with sales of electrical and home categories up 78% and 53% respectively. Fashion saw a significant decline, in contrast to its clothing online pureplay competitor ASOS which yesterday raised its full year revenue growth forecast. Nonetheless, a 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 grow new customers by over 100% in the final quarter with various flexible payment options during a time of economic uncertainty appealing to consumers. With people purchasing big ticket items such as home office equipment and garden furniture, the option 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, swift and decisive action ensured it achieved profitability. Stress testing led to measures such as cost reduction, inventory control and tight management of capital spend. Combined with increased sales, these cost cuts have helped to boost EBITDA, which is forecast to reach £255-270m in FY2019/20. The group will finish the year with over £200m in cash, which not only provides long-term security, but also scope for expansion or investments.”