Etailer Very’s sales surpass £2bn as new customers double in lockdown

The online retail group, which rebranded to The Very Group from Shop Direct earlier this year, reported a 36% jump in sales at Very in the quarter to June 30.

Full-year growth at Very is set to rise by more than 10%, with growth across the group exceeding £2bn for the first time.

This jump in sales has been driven by new customers doubling across the final quarter, with a 128% spike in cash-paying customers and an 80% surge in credit customers.

The etailer expects full-year EBITDA to be in the range of £255m and £270m, which management forecasts will also result in achieving a pre-tax profit after pre-tax losses of £185.5m the previous year.

Chief executive Henry Birch credited the strong performance and rise in new customers in large part to the diversity of the offer.

“We saw consumer trends during lockdown reflected in what people were shopping with us for, starting with fridge-freezers when people were worried about hoarding food, to laptops and iPads, through to gaming, loungewear, blow-up Jacuzzis – a personal favourite of mine – then garden furniture and home. It’s the beauty of our model that multi-category means we have no over-reliance on any one category.”

While the retailer’s fashion performance was down year on year, Birch says that decline was more than cancelled out by rises in electricals and home, which rose 78% and 53% respectively in the quarter.

Birch says the retailer’s integrated credit offering was also a contributing factor to its recent sales momentum.

“Some of it will be product availability – we all remember in some cases hunting for a particular product and buying it wherever you could find it. But more than that our offer of integrated credit, which offers flexibility on how and when people pay – if there’s an uncertain future ahead, shoppers have gravitated towards that flexibility.

“We think that our model actually chimes with the times in terms of giving people confidence that if they do need to pay for something over a period of time they can do that.”

The retailer’s new state-of-the-art Skygate distribution centre in the East Midlands, which opened in March, also bolstered product availability during lockdown. The group maintained full operational capacity across its distribution network and was even able to increase its next-day delivery cut-off from 7pm to 10pm – it plans to extend that to midnight in the future. The DC’s automated technology enables it to process an order and dispatch it in 30 minutes.

The retailer’s diverse offering, robust operations and credit offer means Birch is confident the business is well placed to outperform the market, both in the crucial Golden Quarter and the year ahead – notwithstanding recession.

“What we’re currently seeing and saw in the fourth quarter gives us every confidence that we’ll have a strong peak trading period,” he says.

“Our model in terms of being multi-category and having that integrated credit offer means that it chimes with consumer sentiment, so we are confident. If you look back to the financial crisis of 2008/09 we performed really well through that. We can’t predict the future but we have confidence heading into the rest of the year.”