Strong peak trading and good progress in delivering our ‘Nouvelle Confiance’ strategic plan
London, UK, 2014-2-7 — /EPR Retail News/ — Darty plc today announces an Interim Management Statement for the period from 1 November 2013 to date. Financial information is for the third quarter period from 1 November 2013 to 31 January 2014, based on unaudited management accounts.
Summary
Good progress during the quarter in delivering our strategy ‘Nouvelle Confiance’:
- ‘4Ds’ plan to Drive trading, Digitalise Darty, Develop the brand and Deliver cost efficiency
- Further market share gains in our core markets with total revenue up 3.2 per cent on a like-for-like basis and up 4.9 per cent in France in challenging and promotional markets. Group gross margin down 80 basis points in line with expectations
- Continued double-digit growth of web-generated sales in our core businesses confirming customer demand for our multi-channel offer
- Completed head office reorganisation in France to improve cost efficiency
- Future growth opportunities pursued to further strengthen Darty’s leadership position in France from:
- expansion into smaller catchment areas through franchisees, the first to open next month with a further four by April 2014
- the proposed acquisition of Mistergooddeal.com to extend the ‘low price/pay-as-you-go services’ offer
- Further elimination of losses in our non-core markets with the agreement to sell Darty Turkey
Q3 revenue change (3 months to 31 January)
| Euros | Local Currency | Like-for-like | |
| Darty France | 3.6% | 3.6% | 4.9% |
| Belgium and the Netherlands | 0.1% | 0.1% | (1.3)% |
| Other* | (10.6)% | 0.2% | (1.0)% |
| Total | 1.7% | 2.7% | 3.2% |
| Total exc Darty Turkey | 2.5% | 3.0% | 3.4% |
* Datart and Darty Turkey.
Régis Schultz, Chief Executive, commented:
“I am pleased with the further progress we have made with our new ’4Ds’ plan to Drive trading, Digitalise Darty, Develop the brand and Deliver cost efficiency, as evidenced by strong sales and market share gains. I would like to thank all our colleagues for their efforts over this peak period.
“We continue to make rapid progress with our ‘Nouvelle Confiance’ strategy with the roll-out of the franchisee operation to commence next month and the proposed acquisition of Mistergooddeal.com, both of which will build on our leadership position in France.
“We have also successfully implemented our cost saving programmes to deliver annual gross cost savings of €50 million by 2014/15, which will help mitigate continued product margin pressure in an environment that is expected to remain difficult and promotional.”
Group
Total Group revenue was up 2.7 per cent in local currency and up 3.2 per cent on a like-for-like basis. We saw strong growth in tablets and smart phones and progress in large white goods and small domestic appliances. The rate of decline in Vision moderated and we saw strong sales of new Ultra HD/4K and OLED screens demonstrating the quality of both our offer and sales colleagues.
Further strong growth in web-generated sales confirmed customer demand for our multi-channel offer.
Gross margin was down 80 basis points in line with expectations and also reflecting ongoing price pressure in challenging and promotional markets.
Darty France
Darty France strongly outperformed the market in the period, with market share gains in all major product categories. Total revenue was up 3.6 per cent and up 4.9 per cent on a like-for-like basis with growth in all major categories other than vision, where there continued to be some weakness. As part of our plan to drive trading, we held a number of VIP private shopping evenings in late November/early December and a voucher campaign on white goods post Christmas and ahead of the January sale. The first day of the sale saw revenue up nearly one third compared to the same day last year, both in store and on-line with Darty.com receiving nearly one million visits. Overall for the quarter, web-generated sales grew over 10 per cent to over 14 per cent of total product sales.
In line with our plan to drive trading we saw gross margin decline. The overall decline of 110 basis points for the period also reflected competitive market conditions which became increasingly promotional in the lead up to and through the peak trading period.
Belgium and the Netherlands
At Vanden Borre in Belgium and BCC in the Netherlands revenue was up 0.1 per cent and was down 1.3 per cent on a like-for-like basis, against solid growth in the same period last year. Web-generated sales continued to grow strongly, up again over 12 per cent to 11 per cent of total product sales.
Vanden Borre further improved its position with strong sales growth and market share gains, with a record start to the sales period in early January. BCC continued to be adversely impacted by what remains a very difficult and highly promotional market. Having annualised the introduction of free delivery, BCC saw an improving gross margin trend. Continued strong growth of lower margin communications products in both markets resulted in the overall improvement in gross margin pressure being limited to 10 basis points across the two businesses.
Other
Revenue at Datart and Darty Turkey was up 0.2 per cent in local currency and fell by 1.0 per cent on a like-for-like basis, with a positive performance at Datart. Overall, gross margin was up 100 basis points for the period.
Discontinued operations
As announced on 18 December 2013, the Group entered into binding heads of terms with Turkish specialist technology retailer Bimeks to sell the Group’s Turkish operations, Darty Turkey. The asset sale agreement was signed on 22 January 2014 and it is expected the asset transfer will complete by the end of this financial year. Under the agreement we anticipate around a €10 million cash outflow this financial year, to be broadly off-set by cash inflows in the new financial year. Darty Turkey will be treated as a Discontinued operation for the financial year ending 30 April 2014.
Financial position
Except as detailed above, there have been no material events or transactions impacting the Group’s financial position that have taken place since the previously announced 30 October 2013 balance sheet date.
Store numbers and selling space as at 31 January
| Store numbers | Selling space (000 sqm) | |||
| 2014 | 2013 | 2014 | 2013 | |
| Darty | 226 | 229 | 311.4 | 314.2 |
| Belgium and the Netherlands | 116 | 115 | 127.9 | 127.2 |
| Other* | 71 | 72 | 71.3 | 75.0 |
| Group Total | 413 | 416 | 510.6 | 516.4 |
* Datart and Darty Turkey.
There will be a telephone conference call for analysts at 08:00 on 6 February 2013. Dial-in number: +44 (0) 20 3003 2666. A recording of this call will be made available after 10.00am. Replay dial-in number: +44 (0) 20 8196 1998, Access Pin: 3439586.
The Group will issue its Full Year Results on Thursday 19 June 2014.
Enquiries
Analysts
Darty plc
Simon Ward +44 (0) 20 7269 1400
Media
UK RLM Finsbury
Rollo Head +44 (0) 20 7251 3801
Jenny Davey
France
Le Public Système
Ségolène de Saint Martin +33 1 41 34 23 31 / +33 6 16 40 90 73