Ideal Shopping Direct has swung from heavy losses to an expected profit in less than a year, spearheaded by a number of new senior appointments.
The homewares retailer said it expects to record a £5m profit in its results for the financial year to December 2019 – a pronounced swing from the £32m loss it made in the same period last year.
During this period, Ideal Shopping Direct saw a 6.5% uptick in average gross margins, while own-brand margins increased by 23%. It said it expected its pre-tax turnover to be £170m.
Ideal Shopping Direct is one of the UK’s largest multi-channel home shopping retailers, which sells to over 31 million UK customers through shopping channels on Sky, Freeview, Virgin and late-night ITV.
The Peterborough-based retailer has two main channels: Ideal World and Create and Craft. The latter has attracted over 14,500 new UK customers in 2019 and the average spend per customer went up 3.6%.
The turnaround was led by new chief executive Jamie Martin and new chief operating officer Martin Purcell, who both joined the retailer in December 2018.
Martin and Purcell have invested £4m in new technology, brought in new suppliers and overhauled the Ideal World brand.
Martin said: “This is the biggest turnaround in live home shopping history. It has been a year of significant change, experimentation and learning while laying the groundwork for the future. Average order value and order frequency is up on last year and all other metrics have begun to plateau bucking the previous aggressive downward trend before I joined the business.
“It’s a simple story of sales up and costs down. We made tough choices to reduce our workforce by 110 people and negotiated new and better deals with suppliers. The business has also streamlined various aspects such as changing the way we source in China, cancelling marketing programmes that were not working and spending more money on our digital marketing, all of which have had a material impact on our profitability for the better.”
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