Very Group fashion sales dip but upscale labels boom

Very Group is having a tough time with revenue down 0.8% to £1.6 billion but specific fashion and sports retail sales down 5.7% in the 39 weeks to the end of March.

This was caused by the overall difficult backdrop that meant the environment was very promotional.

The star Very UK operation makes up 86% of group sales and managed a 1% revenue rise to £1.4 billion. But the much smaller Littlewoods division – which has been in decline for some time – saw revenue falling 11.9% to £174.5 million. The company said this drop had been expected.

Its pre-tax loss for the year so far was £2.1 million, much worse than the £11.7 million profit of the same period a year ago.

Within those sales figures, there were quite widely varying performances. For instance, overall retail sales fell by 1.8%, but as mentioned, fashion and sports, retail sales were down almost 6%, and at the Very UK division in particular, they fell 4.9%.

It’s well known how promotional the fashion market has been in recent months, so the figures aren’t a surprise. But perhaps more surprising is the fact that the company’s premium fashion division saw sales growth of 19.4%. This was at a time when premium fashion sales across the UK have been suffering as much as those lower down and higher up the price range.

Tash Van Boxel, Retail Analyst at GlobalData, highlighted the variation in performance across the different units that the company operates and had some advice for the group.

She said: “Amid muted spend at the beginning of 2024, the Very Group stumbled. This poorer result was due to a continued decrease in its Littlewoods sales. While its Very UK revenue growth remained positive, it has decelerated over the financial year.

“Very Pay continues to thrive, with revenues up 3.2% as consumers continue to turn to finance options. Though this is still a small part of the business, The Very Group must continue to promote its financial services to bolster average basket size and boost spending. In the lead-up to wedding season and the summer months, consumers are likely to welcome the reprieve on their finances by being able to spread the cost.”

And she thinks there’s a clear opportunity for Very in the premium segment as its almost-20% increase shows.

“Fashion and sports sales declined in the period, despite demand for premium fashion remaining high,” she said. “However, given that 68% of consumers stated that they bought more or the same amount of premium clothing in the last 12 months, according to GlobalData’s May 2024 consumer survey, Very should continue to expand these ranges to support its sales.”