6th Feb 2014 12:26
LONDON (Alliance News) - Electrical retailer Darty Group PLC Thursday reported an increase in revenue for the third quarter, which it said was driven by a combination of improvements in traffic and conversion rates.
The group said total group revenue was up 2.7% in local currency, and up 3.2% on a like-for-like basis, for the third quarter period to the end of January.
"This was driven by a combination of improving traffic and conversion rates," Chief Executive Officer Régis Shultz told Alliance News after the company released its trading update.
"Our commercial plan and strategy worked well, consistent in driving market share gains. We are seeing growth in terms of traffic in store, currently two percentage points. We also included more self-service tills, which also helped," he added.
The group said it saw strong growth in sales of tablets and smart phones and progress in large white goods and small domestic appliances, although at the same time it was slightly disappointed with the performance of tablets.
"One of the best sellers was automatic cook and mix machines. We saw good growth in all categories, compared with last year which as all about tablets. In some ways tablets have been disappointing in terms of gross, but not volumes," said Shultz.
However, during the period, the group still struggled to protect its margins, which it said are still facing pressure due to increased promotional activity. Gross margin was down 80 basis points in the third quarter, in line with expectations, it said.
Darty said it saw further growth in web-generated sales during the period, of around 10%.
"We see this increasing over the course of the year," said Shultz, adding: "The real winners of the internet is bricks and mortar retailers with a strong multi-channel presence. Consumers want to have the best of both worlds, and you need to provide that."
The company has been gradually reducing its store numbers and selling space, having agreed to sell its Turkish operations to Turkey-based specialist Bimeks, the same group that bought Dixons Retail PLC's ElectroWorld chain in Turkey last year.
"There are no big plans to lose stores, especially having now sold the Turkish business. We are continuing to monitor store space, and will actually add stores through franchise space in France," said Shultz.
Darty is now focused on expansion into smaller catchment areas through franchisees, the first of which will be open next month, with a further four by April.
Shares in Darty were trading 1.2% higher midday Thursday at 128.75 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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