Retail giant The Very Group has announced that it has returned to profitability and achieved record-breaking sales, surpassing £2 billion for the first time. The company also reported strong growth in group retail sales at the start of FY21. Very.co.uk, The Very Group’s online retail platform, saw a 10.5% increase in sales to £1.23 billion during the last financial year. This contributed to an overall revenue growth of 2.9% to £2.051 billion for the group. The customer base at Very.co.uk expanded by 14.1% to 3.4 million, resulting in a 10.6% increase in total group customers to 4.5 million. Furthermore, the site’s share of the non-food market expanded during Q4.

In contrast, Littlewoods experienced a planned decline, as anticipated, with sales dropping by 8.8% to £460.9 million. Despite this, The Very Group achieved a pre-tax profit of £48 million and an underlying EBITDA of £264 million, after accounting for the costs associated with the Covid-19 pandemic. The company’s volume growth and cost efficiency measures mitigated the impact of the pandemic on EBITDA. However, there was a 3.1 percentage point decline in the group’s gross margin to 36.5%, primarily due to lower financial services income, increased provisions for Covid-19 bad debt, and changes in product mix.

The Very Group witnessed the most significant growth in categories outside of fashion, although the fashion and sports segment still experienced a 0.9% growth, especially in women’s and children’s sports clothing. Throughout the year, the company introduced over 100 new brands and expanded existing partnerships, which included the addition of renowned brands such as Topshop and Mint Velvet. The company also onboarded 50 new beauty brands, such as Elemis, Cowshed, Iconic London, Delilah, Nip + Fab, and Ren.

The Very Group made substantial investments in enhancing its digital operations, including the establishment of a highly automated fulfilment center called Skygate. Additionally, the company continued to invest in its AI-powered chatbot, which enables customers to seek assistance on common queries in their own words. The chatbot handles approximately 25,000 to 30,000 customer interactions per week and was recently launched on the Very website.

The Covid-19 pandemic has resulted in significant shifts in the shopping habits of British consumers. More people are now shopping during working hours, as remote work allows individuals to browse online without scrutiny from their managers. However, these patterns have returned to normal since the end of lockdown measures. While Thursdays and Fridays were popular shopping days during the lockdown, they have since reverted back to early weekdays. A notable trend is the continued increase in mobile app usage for shopping, with 81% of orders originating from mobile devices between April and August. Home deliveries have also become the preferred option, accounting for 80% of total deliveries in Q4, compared to 67% in the previous year. Although these figures are gradually returning to pre-pandemic levels, a complete reversion has not yet occurred.

(Useful links:
1. The Very Group
2. The Guardian – The Very Group Profits and Sales)