Profits increased more than 63 per cent at Littlewoods’s Irish unit last year as the online retailer enjoyed sales growth across all categories in the midst of the Covid-19 pandemic, newly filed accounts for its parent Shop Direct Ireland Ltd show.
The group saw its profit for the financial year ended July 3rd, 2021, grow to €12.1 million, up from €7.4 million the year before.
The home shopping retailer, which also offers financial services, ditched its famous print catalogue in May 2015 after 80 years and now only operates online.
The group's ultimate parent Shop Direct, which operates both the Littlewoods and Very brands in the UK, is owned by billionaire brothers Sir David and Sir Frederick Barclay.
Growth
Turnover for the year was €126.8 million, which was up 18.7 per cent on the previous year. The growth was across both seasons with the first half of the year up 29.8 per cent while the second half was up 7.1 per cent.
Gross profit grew from €44.1 million to €49 million, which was an increase of 11.2 per cent. The growth was driven primarily by increased sales across all categories of the business.
The group said the most significant growth was within sports, electrical home and children’s wear. However, it noted that the women’s fashion market “remains challenging”.
The cost of sales at the group also increased, rising from €62.7 million to €77.8 million. The directors said they would not pay a dividend.
The group’s principal activities during the year were internet home shopping and related financial services products.
The group said there “continues to be a focus on cost control”, including tight credit management of bad debt and cash generation while continuing to invest in the customer base.
The company “continues to monitor the Irish marketplace and economic conditions” and said it would consider the introduction of other group brands and services to support its growth strategy at an appropriate time.
Key developments in the financial year saw the continued review of its pricing strategy to drive sales growth. There was a decrease in promotional activity across all categories compared with the prior financial year.
The Irish retail sector was described by the directors as “very challenging” due to consumer concerns regarding Covid-19 and as a result of Brexit.
Investments
The business maintained its investment in above the line (mass market) advertising, particularly television advertising and a sponsorship agreement with the GAA for the All-Ireland Senior Hurling Championship.
It said this resulted in increased awareness and improved trade within its active base, as well as in recruiting new customers.
Investment in performance marketing “continues to grow” as consumer shopping behaviours and patterns change, and there has been “increased investment” in social media and content as the company engages more with its existing and potential customers.
In addition, there was investment in the active base through below the line activities such as email, direct mail and tactical offers.
This expenditure “boosted the trading performance” of existing customers. There has been a continued transition to mobile devices, which now accounts for 87 per cent of the traffic to the company’s website.
