Shop Direct has swung to a multi-million-pound loss for the year after being hit by store closure costs and PPI mis-selling payouts.
The fashion retailer posted pre-tax losses of £24.7 million in the year to June 30, down from a profit of £24.9 million a year earlier, while operating profits jumped 11 per cent to £262.3 million.
Group sales edged up 1.5 per cent to nearly £2 billion as Very helped offset a poorer performance at its stablemate Littlewoods, posting a sales rise of 9.9 per cent to £1.4 billion.
Revenues at Littlwoods took a nosedive, dropping 14.5 per cent to £569.7 million thanks to meagre furniture and homewares sales and the scrapping of its customer rewards scheme.
It also struggled with a hefty “customer redress” bill of £128 million related to PPI mis-selling, alongside a £22.5 million provision to cover the costs of the closure of three warehouses in Greater Manchester.
In April Shop Direct announce that 1992 employees would face redundancy as it shut close three warehouses in Shaw, Little Hulton and Raven, consolidating operations to a new site in East Midlands Gateway.
Shop Direct said these sites no longer met its “operational ambitions”, due to limited accessibility options.
“Four months into my role as CEO, I’m hugely excited by the potential of Shop Direct,” the groups new chief executive Henry Birch said.
“Today we’re announcing results that show a good underlying performance in a competitive external market.
“We’re trading in line with our expectations and preparing for the important peak season. It’s a changing and competitive market but our growth trajectory and differentiated customer offer gives us confidence for the year ahead.”
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