Shop Direct hails ‘digital age’ as it returns first profit in a decade

Surging sales on mobiles and tablet computers helped the owner of online shopping and catalogue brands Very and Littlewoods deliver its first annual profit in a decade.

Retailer Shop Direct swung to pre-tax profits of £6.6m for the year to the end of June, versus £57.7m losses a year earlier.

Celebrity endorsement from Fearne Cotton and Myleene Klass also bolstered its performance, with sales rising 1 per cent to £1.69bn.

Sign up to our Business newsletter

Sign up to our Business newsletter

Liverpool-based Shop Direct said the “digital revolution” meant online accounted for 81 per cent of its sales between July and September, rising from 78 per cent during the year and 75 per cent in 2012.

And 38 per cent of its online sales came via mobile devices in its latest quarter, compared with 20 per cent during 2012.

The group, which is owned by the Barclay brothers, who also own the Daily Telegraph newspaper, delivered 25.9m parcels during the year, containing 45.6m products.

Meanwhile, Shop Direct more than halved its catalogue distribution to 4m, compared with 8.2m a year earlier. Undisclosed exceptional costs dropped to £8.4m from £46.2m a year earlier.

Chief executive Alex Baldock said the return to profit is a key milestone in its digital progress, giving a “solid platform to move forward”.

He said: “We occupy a unique position in the UK’s digital retail market by making good things easily accessible to more people, and are proud of the part we play in our customers’ lives.”

Shop Direct said its newer brands Very.co.uk and isme.com will be its “future growth drivers”, after hiking sales 18 per cent.

But while its “heritage” brands Littlewoods.com and KandCo.com saw sales fall 7 per cent, profits there held steady.

Its digital expansion is delivering “significant gains”, with its growing bank of data allowing it to target customers with unique emails and product suggestions.

And it said the addition of brands including Lyle & Scott, Hunter and St Tropez are boosting its appeal, with more than 800 brands stocked.

It has expanded TV presenter Fearne Cotton’s collection for Very to include furniture and home goods, while singer Myleene Klass has added swimwear and lingerie to her Littlewoods range.

Mr Baldock said the group is focused on a strong Christmas performance, as it predicted best-sellers including novelty jumpers, onesie body suits and the PlayStation 4.

The group employs about 4,000 staff, with roughly half in its Speke head office.