Following today’s release of the The Very Group’s figures for the 52 weeks ending 1 July 2023; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Despite a challenging year for online pureplays, with the offline channel resurging and weaker demand for online shopping, The Very Group has navigated this issue well, with group revenue remaining broadly flat at £2,150m. This has been driven by Very UK’s performance, while its Littlewoods arm remains in decline. Nevertheless, despite growth in Very UK, adjusted EBITDA has declined on FY2021/22, down 5.1% to £276.5m in this financial year, driven by higher business costs and investment in its pricing architecture.
“Very’s investment in AI is expected to boost group revenue in the coming years, as the enhancements it is making to its online platforms will support the online shopper journey. Indeed, with the release of faster and more efficient search tools, the online pureplay can improve its conversion rate as consumers are better able to find products. AI will also help The Very Group to improve its profit margins through the streamlining of its operations, resulting in more accurate forecasting and faster response times to changes in demand and improvements to product availability.
“Very UK has achieved revenue growth this financial year – though this was against a weak comparative – up 1.9% to £1,820m, boosted by strong performance in its toys, gifts & beauty category, up 13.0% year-on-year. This has been driven by double digit growth in beauty, which is expected to continue to outperform for the retailer, supported by Very’s AI developments which will enable consumers to try makeup on virtually before buying. This will ensure that the shopping journey becomes easier for consumers shopping this sector and enables Very to keep up with competitors, such as Feelunique. However, its fashion & sport category has faltered this financial year, falling 8.2%. This decline is due to the highly saturated market, culminating in stiff competition in the sector, with consumers opting to shop at the likes of JD Sports which is more of a destination for sportswear brands. Though Very will struggle to compete with value players, it is wise to invest further in its own brand ranges, as this will give consumers the option to trade down within the retailer, rather than switching away.”
