Shop Direct falls into the red with 10.7 million pounds loss over PPI claims
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London - Shop Direct, parent company of Very.co.uk and Littlewoods.co.uk, revealed a loss of 10.7 million pounds for the nine months to March 31, 2018 - putting the multi-brand retailer in the red.
The loss hits hard when compared to Shop Direct's 57.4 million pound profit for the same period last year. However, Shop Direct has attributed part of its loss to regulatory costs of 100 million, which it has set aside to pay PPI claims as the deadline has been extended to August next year by regulators.
PPI, or payment protection insurance, is usually sold with credit cards, store cards, and loans, but it was found to be often mis-sold. Shop Direct, which offers customers the option to pay using store credit, paid out close to 80 million pounds to customers during the nine months ending March.
Outside of its loss, Shop Direct reported a 1.6 percent increase in group revenue to 1.51 billion pounds, boosted by Very.co.uk, which saw a revenue growth of 10.6 percent to 1.06 billion pounds. Strong sales at Very helped offset the decline in Littlewoods, which saw revenue drop 15 percent to 445 million pounds.
Shop Direct's retail sales increased 1.2 percent, as clothing and footwear revenue growth fell flat at 0.6 percent.