Studio Retail profits grow as it anticipates ‘strong’ Christmas trading

Adjusted operating profits for the full year to March 27 grew 3.9% to £39.9m, while revenues went up 2.2% £514.8m.

In the 20 weeks since, Studio has seen a 42% jump in sales year on year, which the group hopes to build on in the coming months.

Customer numbers have also increased 11% during lockdown to 2 million with the majority being repeat customers who are likely to visit again before Christmas.

The pureplay retailer said it anticipates “sales growth for the remainder of FY21 will moderate to nearer the levels seen in recent years” and it is well placed to see “medium-term profit growth”.

Studio plans to increase its marketing spend on TV adverts and issue a smaller version of its paper catalogue to customers on a more frequent basis as a “call to action” for them to make purchases online.

Outgoing chief executive Phil Maudsley said: “The year FY20 seems a world away now, but it was a year in which we made operational progress as a group, ensuring we were ready to face Covid-19 from a position of strength.

“As the public has remained at home, more and more customers have been attracted to, and become aware of, our phenomenal online value offer. It is now up to us to keep up the momentum and make sure our proposition continues to resonate at a time when shopping habits are moving online and consumers are valuing the pound in their pocket more than ever before.

“While wider economic uncertainty exists, we are in a digital sweet spot. We are a business on a strong footing with the correct strategy and we are confident of the long-term opportunities open to us.”

Incoming chief executive and current managing director Paul Kendrick said: “Because we’re in the value sector, most of our competition is high-street oriented, so our customer base will shop with the likes of B&M and Primark, neither of which are online, so we are unique in that respect. We offer very strong value but we are an online player at the same time.

“Our fulfilment model, where we keep our costs low and the way we supplement it with the various payment options, has allowed us to operate the business as we do.

“We think Christmas will be a strong Christmas. As we’ve gone through lockdown, our customers have not been able to have family holidays and celebrations in the way they previously had, so now Christmas is the next big event.”

Maudsley added: “We’ve seen during lockdown strong customer recruitment, strong customer activity and lots of new customers joining the business and all of those will repeat as we go into the big selling period. Not only have we seen a substantial increase in the number of customers but their average spend is also well up, so this all bodes well for a good Christmas season.”