Challenging economic conditions have led to a decrease in sales and widening losses for Very Group in the first quarter.
- Very Group’s losses before tax rose significantly from £5.8m to £22.9m over the year.
- Group sales declined by 5% to £450.2m, with the flagship Very UK brand down 3.8%.
- Fashion and sport sales experienced an 8.6% downturn, while beauty and home categories saw slight growth.
- CEO Robbie Feather remains optimistic about the company’s resilient performance and future profitability.
The financial performance of Very Group in the first quarter of the fiscal year reflects the broader challenges faced by the retail sector. Losses before tax surged to £22.9 million, compared to £5.8 million the previous year, marking a significant increase in financial pressure. This escalation in losses coincided with a 5% drop in group sales, bringing total revenue down to £450.2 million for the quarter.
The primary contributors to this decline were varied, with the flagship Very UK brand experiencing a 3.8% reduction, bringing its revenue to £392.1 million. Meanwhile, Littlewoods, another significant component of the company’s operations, saw a sharper decline of 14.4%, reducing its revenue to £45 million. These figures underscore the financial strain within the company’s operations.
A closer look at the sales trends reveals that not all sectors performed uniformly. Retail sales decreased by 4.6% to £286.4 million, heavily impacted by an 8.6% downturn in the fashion and sport segments. This was largely attributed to a market characterized by heavy discounting and contraction. On the other hand, there were modest gains observed in other segments, with beauty and home categories increasing by 4.2% and 2.5% respectively. Despite these modest increases, the electrical segment saw a decline of 4.4%.
The current retail environment poses significant challenges; however, Very Group’s CEO, Robbie Feather, maintains a hopeful outlook. He highlighted the unique business model which combines multi-category digital retail with flexible payment solutions as a key factor in sustaining operations during these times. Feather noted, “Our unique business model, combining multi-category digital retail with flexible ways to pay, is more relevant than ever for our customers.” Even amidst these challenges, the company claims to have performed better than the UK online non-food market and continues to see strong performance from Very Finance, a significant part of their business model.
Feather attributes the company’s ability to weather this difficult period to strong cost management and a loyal customer base. Looking ahead, the company expects to strengthen profitability in the fiscal year 2025, driven by what it describes as robust earnings growth. The company’s resilience amidst tough times is a testament to its inherent strengths and strategic customer engagement.
Despite current losses, Very Group is focused on leveraging its business model for future growth.
