Littlewoods Shop Direct expected to double profits
LONDON - Littlewoods Shop Direct is expected to double its annual profits to £50m, as the Barclay brothers-owned business continues its repositioning from a high street catalogue chain to a fast-selling online retail business.
The company, which was acquired by the Barclay brothers in 2002 for £750m, said it expected to record around £50m in earnings before interest and tax in the year to April 2008, marking a £25m rise from last year.
Sales for the Liverpool-based business, which had been in decline for a decade, are expected to top £1.7bn for the last 12 months following a raft of changes implemented by chief executive Mark Newton-Jones. Online sales for the year are expected to reach £500m.
Littlewoods Shop Direct's strong growth is being attributed to a number of industry factors, including its decision to sell off its remaining high street stores in 2005 and refocus as an internet consumer retail company.
The growth has led the company to bring forward its previous target of generating 50% of its sales via internet by 2011 to this year. It has changed its 2011 target to 70%.
The retailer also hired 'What Not to Wear' lifestyle gurus Trinny Woodall and Susannah Constantine to front a WCRS-created multimillion-pound TV ad campaign in April last year, which featured the strapline: "Mission improbable".
According to the retailer, the celebrity endorsement has helped it attract newer and wealthier customers and grow the number of household brands it sells from 200 to 400.
In addition, the business is expected to shrink its 1,300-page catalogue by a third next year and is in discussions about launching a monthly customer magazine.
According to Littlewoods Shop Direct, more than 50% of its new customers are now aged 18 to 35, compared with 25% of its long-standing customers.
Meanwhile, the business is now the UK's largest online clothing and footwear retailer, with around 12% of the market share.
Mark Newton-Jones, chief executive of Littlewoods Shop Direct, said the business was two years into a five-year recovery programme that would "morph it into an online retailer".
In January, the business reshuffled its board and made David Inglis, group buying and merchandising director, trading director; while Clive Briscoe, sales and marketing director, announced he was stepping down.
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