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Losses grow at Shop Direct

Shop Direct has reported a loss before tax of £185.5m for the 52 weeks to 30 June, compared with a £24.9m loss in 2017/18, after it made a £241m provision for “customer redress payments for historical shopping insurance sales”.  

The group upped the provision by £150m following an “unexpected surge in claims” in August, during which it received more than 276,000 PPI claims. It said its “typical” monthly run rate was 40,000.

A further £69.2m exception cost was attributed to insurance-related business.

Shop Direct’s Littlewoods online catalogue division was hit by an 11.3% year-on-year drop in revenue to £505.3m.

Very, meanwhile, reported a 7.1% increase in revenue of 7.1% to £1.49bn, and customer growth of 5.7% to 2.98 million.

Shop Direct’s group revenue grew 1.8% year on year £1.99bn, which it said was driven by Very. This is up from £1.95bn last year.

Group clothing and footwear retail revenue was up 2.9% year on year.

Full-price sales represented 63% of clothing and footwear total sales – up from 58% last year. It said sportswear was its “standout” category, for which revenue grew by 11.8% during the period. It also launched Topshop, Topman and Topshop Beauty on Very on 23 August.

Furniture and homewear was the only category monitored to record a drop – down 1.7% year on year. Both electrical and seasonal goods reported increases in revenue.

Reported EBITDA increased by 3.3% year on year to £271m, but “bad debt” continues to hit its bottom line.

Shop Direct announced plans to rebrand as The Very Group later this year, in March.

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