Littlewoods owner Shop Direct has moved into the red in the last 12 months, as rising construction costs for new distribution centres and mounting PPI mis-selling claims mount up for the online retailer.
Pre-tax losses hit £24.7m in the year leading up to the end of June 2018, compared with profits before tax of £24.9m in the same period a year earlier.
Income from Littlewoods’ also took a hit, dropping from £666m to £570mm, which the group blamed on the closure of the brand’s customer rewards scheme and a “challenged” furniture and homeware performance.
Shop Direct, which is owned by the billionaire Barclay brothers, has seen millions of pounds claimed back in compensation to customers who pay for items with store credit, in the wake of UK regulators finding the frequent mis-selling of PPI.
However, Shop Direct’s boss said the results showed a “good underlying performance”, with strong sales at Shop Direct’s Very.com outlet bumping earnings before interest, taxes, depreciation and amortisation (EBITDA) up 11 per cent to £262.3m, while revenues approached the £2bn mark.
Henry Birch, group chief executive, said: "Impressive growth in Very and increases in group revenue and EBITDA show the resilience of our business, which is mobile-first, multi-category, and both a retailer and a credit provider.
"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."