Against the backdrop of challenging trading conditions and constrained profitability we took the decision to scale back investments in some areas and refocus our efforts on stabilising profitability. Despite this, our teams rallied together and delivered good strategic progress in FY24. Our strategy is currently under review and will communicate this in the early part of 2025.
Our strategic aims
Progress:
- Recruited a new Commercial Director to lead our overall product, sourcing and quality strategy, and to ensure our product proposition continues to evolve and is aligned with our purpose.
- Improved our product proposition through the introduction of new toys and games ranges, which performed particularly well in H1. We relaunched our kids’ book range during spring 2024, with a much clearer offer from baby and toddler through to fiction books for young adults, including the introduction of more fun-learning books and a broader range of kids’ fiction titles.
- Continued to evolve our brand to fulfil our purpose to inspire reading, learning, creativity and play. We commenced a project to make our brand positioning clearer, which is being rolled out this Christmas and includes the introduction of our new TimeWellSpent strapline. This captures the important role we play in supporting families with affordable, feel good ways to spend their time and connecting people with screen-free things to do.
Priorities:
- Design and embed a new Brand framework across the business to support the successful launch of #TimeWellSpent.
- Continued evolution of product proposition under the direction of the new Commercial Director.
Progress:
- Delivered improvements to the website to enhance the customer experience, supported by new analytical tools including revamping our homepage, optimising product pages and improving navigation across the site. These changes have seen an improvement on all key metrics, including conversion, and have laid the foundation for further improvements in 2024.
- Actively tested new trading mechanics to determine the most effective strategies for engaging our customers, testing a mix of limited-time discounts, web exclusives and bundles, as well as delivery initiatives to give better choice on delivery. Early results indicate that targeted promotions have not only increased sales but also enhanced key KPIs such as AOV and profit per order.
- As part of our broader efforts to improve profitability across the business, we implemented changes to our online channel in H2, for example increasing the free delivery threshold and increasing delivery charges. This impacted sales but improved profitability.
Priorities:
- Improve our digital analytics capabilities to support data driven decision for tactical trading plans and for future strategic initiatives.
- Continue to focus on improving the profitability of the website through increasing AOV whilst reducing cost to serve.
Progress:
- Focused on maintaining the overall quality of our store portfolio, ensuring we have the right stores in the right locations for our customers. This included 9 openings, 24 closures, 5 relocations and 21 refits. The business traded from 511 stores at the year end, of which over 96% are profitable.
- New stores performed in line with their investment models and with strong payback of c.12 months. The majority of closures were of loss-making or low-profit stores where we were unable to agree suitable terms with the landlord.
- Successfully negotiated with landlords on FY24 lease renewals, delivering £0.8m in annual rent savings.
Priorities:
- Continue to drive rent savings with a particular focus on marginal performing stores.
- Focus on improving the estate through selective refits, relocations and closures of existing stores and opening of new stores.
- Increase in-store sale densities.
Progress:
- Moved our online fulfilment centre, operated by a third-party provider iForce, to a more efficient facility in early January, which is expected to save c.£1m per year in operating costs.
- Strengthened Distribution Centre middle management to help embed new ways of working and deliver the expected benefits and efficiencies in the 2024 calendar year.
- Following a successful pilot in 2023, began rollout of new EPOS software (completed in July 2024) that will enable improved functionality on our tills in stores, enabling colleagues to spend more time on the shop floor and respond to customers’ requests quickly and efficiently.
Priorities:
- Continue to enhance stock flows with a particular focus on the top performing stores.
- Formalise IT system roadmap to support strategic system changes.
