Very Group buoyant as sales and profits soar, fashion is strong
Very Group reported its full-year results on Tuesday with sales surging and pre-tax profits leaping even faster at the owner of the Very.co.uk and Littlewoods brands.
The fashion, beauty and general merchandise e-tailer said sales at the Very operation and new customer acquisition drove record revenue for the business with Very retail sales up 24.9% to £1.535 billion and the unit’s revenues up 18.2% to £1.878 billion. The company doesn’t always break out information for the less dynamic Littlewoods operation but it did say that it saw a strong performance from Littlewoods Ireland, with retail sales up 21.7% to £101.5 million.
The group as a whole saw revenue rising 13% to £2.317 billion as Very customer number rose 12.4% to 3.82 million, while group customers were up 7.6% to 4.82 million.
On the earnings front, pre-tax profit at the group was up an impressive 68.8% year-on-year at £81.7 million. And underlying group EBITDA increased 13.7% to £300.5 million, “reflecting increased Very retail sales and improved cost management”. The group gross margin was maintained at 36.5% with improvements in the retail margin offset by a drop in Very Pay platform contribution
Looking at Very in particular, its strongest categories were Electrical and Home, but the Fashion and Sport unit also performed well, seeing an 11.6% sales rise.
Within this, children’s, women’s and men’s sportswear (+67.7%, +50.1% and +24.3% respectively) proved popular, as did celebrity and designer clothing (+69.5%), including Michelle Keegan (+25%). And beauty, fragrance and personal care rose 14.8%, with more than 70 new beauty brands onboarded, including Benefit, L’Occitane and Dyson Supersonic Hair Dryer.
In fact, overall, it saw a net increase of around 100 brands across all categories, including New Look, Never Fully Dressed, Citizens of Humanity, Free People, Cox & Cox and Koble.
It also launched a new stockless fulfilment model with Adidas and Reebok, doubling the product lines available from these brands by shipping direct to customers as well as from the group’s fulfilment centre
The company also said it was helped by some experience improvements it has put in place including its AI-powered chatbot, Very Assistant, that now handles 268,000 queries monthly after being added to the Very website. It’s the firm’s largest customer service channel.
It had extended order cut-off for next day delivery from 7pm “to the industry-leading time of 10pm” too, which helped push sales higher. And many of those sales now come though its app. The firm said app sales were up 45% year-on-year, “boosted by a more personalised, intuitive app experience”.
And it's looking to make further improvements with the arrival of Robbie Feather, former CEO of Fenwick, who’s set to join the business as retail managing director later this year.
CEO Henry Birch highlighted the strong performance, the strategic developments and the hard work of the teams. But he added that “the current environment is not without challenge”.
However, he also said the firm’s “pandemic experience has shown us that our multi-category offer, combining leading brands with our Very Pay platform, is relevant to an increasingly wide number of customers. We are in good shape to face any future uncertainty, and remain confident that we are well positioned to take advantage of a market and customer behaviour that is moving towards our model”.
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