Irish branch of Littlewoods sees profits increase by 63% in the event of a pandemic

Profits rose more than 63% in the Irish unit of Littlewoods last year as the online retailer enjoyed sales growth across all categories amid the Covid-19 pandemic, a recent filing accounts for its parent show Shop Direct Ireland Ltd.

The group saw its profit for the financial year ended July 3, 2021 increase to 12.1 million euros, against 7.4 million euros the previous year.

The home shopping retailer, which also offers financial services, discontinued its popular print catalog in May 2015 after 80 years and now operates exclusively online.

The group’s ultimate parent company, 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 amounted to 126.8 million euros, up 18.7% compared to the previous year. The growth occurred in both seasons, with the first half of the year growing by 29.8% while the second half grew by 7.1%.

Gross margin rose from 44.1 million euros to 49 million euros, an increase of 11.2%. Growth was driven primarily by increased sales across all categories of the business.

The group said the biggest growth was in sports, household electricity and children’s clothing. However, he noted that the women’s fashion market “remains difficult”.

The group’s cost of sales also increased, from 62.7 million euros to 77.8 million euros. The directors said they would not pay a dividend.

The group’s main activities during the year were internet home shopping and related financial services products.

The group said it “continues to be focused on cost control”, including strict bad debt credit management and cash generation while continuing to invest in customers.

The company “continues to monitor the Irish market and economic conditions” and said it would consider introducing other brands and services from the group to support its growth strategy when the time is right.

Key developments in the year saw the continued review of its pricing strategy to drive sales growth. There was a decrease in promotional activity across all categories compared to the prior year.

The Irish retail sector has been described by directors as “very difficult” due to consumer concerns over Covid-19 and in the wake of Brexit.

Investments

The company maintained its advertising investments above the line (mass market), particularly television advertising and a sponsorship deal with the GAA for the All-Ireland Senior Hurling Championship.

He said this has resulted in increased awareness and improved communication among his active base, as well as the recruitment of new customers.

Investment in performance marketing “continues to grow” as consumer behaviors and buying habits change, and there has been “increased investment” in social media and content as the he company is becoming more engaged with its existing and potential customers.

Additionally, there has been investment in the active base through below-the-line activities such as email, direct mail, and tactical offers.

These expenses have “boosted the business performance” of existing customers. The shift to mobile devices continued, which now accounts for 87% of traffic to the company’s website.