E-commerce helps Shop Direct group return to profitability

Thursday, October 31, 2013 - 10:17 by Sarah Collinson

For the past ten years Shop Direct, which owns retailers including Littlewoods and Very, has not been making a profit, but an increase in sales made online has changed all that over the last year.

The £6.6 million in profit it made before tax is a strong sign that e-commerce sales are going to be the saviour of this group, according to The Times.

In the previous year, it had reported a loss of £57.7 million, so it is clear that significant gains have been made in 2013.

Analysts believe that the rise in the use of smartphones and tablets to browse e-commerce sites and services has helped to contribute to Shop Direct's improved performance, as well as the 18 per cent increase in sales made by Very.co.uk and Isme.co.uk, both of which are owned by the group.

With more British consumers carrying out safe shopping online while they are out and about, there has also been a rise in the number of fashion items purchased via the web, which is contributing to the revived fortunes of Shop Direct.

Littlewoods.com did not do as well this year, with a seven per cent dip in sales, but this drop-off is being made up for by positive performance elsewhere.

Sales across Shop Direct were up by just one per cent in the past 12 months, hitting £1.69 billion. But the fact that a loss was averted is no doubt being celebrated by the Barclay brothers, who own a controlling stake in the company.

There is often doom and gloom surrounding traditional retailers which started on the high street and are now struggling to carve a niche online, but in this instance, things are looking up and others could soon follow suit.