Major UK Wholesaler Reports Steep Drop in Annual Profits
One of the leading UK based online retail groups in the home and general merchandize market has reported a steep drop in annual profits according to news reports. The UK wholesaler has reportedly suffered a profit blow of around 13 percent. The group managing director of its struggling catalogue chain is stepping down in June 2011 according to company sources.
The news came as the online retail group confirmed underlying pre-tax profits slumped to £254 million after sales of its two retail brands fell drastically. These UK distributors had already slashed annual forecast previously, providing enough hint of the developing situation.
However, the company has promised to keep up with its policy of continued investments in readiness for the expected consumer spending recovery. It is shoring up its online offerings, opening new stores and going ahead full steam with revamping plans.
The results add a grim picture to the overall online retail sector in the UK following disclosure of figures from another supermarket giant which reported a 0.7 percent drop in its fourth quarter sales.
The UK retail group meanwhile has already issued a warning for tougher times in the future. The company reports an uncertain year ahead as consumers are affected by the January VAT hike and the austerity measures announced by the UK Government. The sales drop for the last financial year for this UK retail giant was around 5.6 percent in the last financial year. A similar broad outcome is being predicted for the current year due to falling sales and weak market currents.
To its credit, the group has been slashing costs over the past two years, saving close to £125 million. The strong cash position of this UK wholesaler is expected to keep its investment and expansion program on track. Even in the extremely challenging economic environment, the company has plans to continue investments in multichannel initiatives, enhancing product presentations in catalogues and online stores and delivering value to customers.