The Very Group reports a significant increase in losses, indicating challenges in the retail sector.
- The company’s pre-tax loss expanded from £5.8m to £22.9m in recent weeks.
- Operating profits saw a decline of 35%, reaching £27.6m as revenues fell 4.9% to £450.2m.
- Despite a drop in fashion and sports sales, homeware sales showed modest growth.
- Strategic focus on high-margin sales aims to strengthen future profitability.
The Very Group, responsible for the digital retail brands Very and Littlewoods, has recently announced a notable loss before tax amounting to £22.9 million over the 13 weeks leading up to September 28. This is a stark increase compared to the previous year’s loss of £5.8 million. The primary drivers behind this downturn include the ongoing economic challenges affecting the retail sector.
Operating profit has also suffered, declining by 35% year over year, resulting in a profit of £27.6 million. Alongside this, the group’s overall revenue saw a reduction of 4.9%, settling at £450.2 million. These figures highlight the tough market conditions that are currently prevalent.
The Very Group detailed that the market in the first quarter of FY25 was particularly challenging, further impacted by existing economic pressures. A marked decline was observed in sales within Very UK, which constitutes a substantial 87% of the total revenue. Year-on-year, Very UK experienced a 3.8% drop in revenue, amounting to £392.1 million, with Littlewoods sales also falling by 14.4% to £45.0 million. The company mentioned that the decline in Littlewoods sales is part of a managed decline strategy.
Despite these challenges, the company noted some positive trends. Home sales have shown improvement, generating higher margins amidst the downturn in the fashion and sports sectors, where an 8.6% reduction in sales was recorded due to a highly competitive and contracting market landscape. Interestingly, premium fashion bucked the trend, reporting a 1.6% growth year over year, while homeware sales climbed by 2.8%.
The Very Group’s pre-exceptional EBITDA for the quarter was £54.5 million, however, this too reflected a decrease as it dropped by 10.1% compared to the prior year. Throughout these financial challenges, the company remains focused on directing its efforts towards boosting profitability through strategic high-margin sales and steadfast cost management. There is a clear intent to navigate through the current economic headwinds with resilience and adaptability.
The Very Group remains committed to strengthening its financial position despite current economic challenges.
