UK: New Report Reveals Disappointing Performance By Mail Order And Catalogue Houses

Moderate increases in sales combined with declining profits have produced a depressing picture for mail order and catalogue houses according to a new Business Ratio report from Schober Direct Marketing. Indeed, it shows that, on the whole, only charities are producing promising profit margins - and that, on average, sales for the industry have seen an increase of just 13.4 per cent whilst pre-tax profits have fallen by 4.9 per cent during the three-year period under review. The Business Ratio report, entitled 'Mail Order & Catalogue Houses', analyses and compares the financial performance of 127 leading companies operating as mail order and catalogue houses in Great Britain. Covering the last full three accounting years (1996/7 to 1998/9) the survey provides individual company analysis as well as performance averages for the industry as a whole.All profitability ratios have seen decreases over the review period. The pre-tax profit margin figure has fallen from 7.2 per cent in 1996/97 to 6.2 per cent in 1998/9, having dipped to 6.5 per cent in the middle analysis year. Return on capital fell from 51.9 per cent in 1996/7 to 46.2 per cent at the end of the period.However, despite this overall trend of decline, the report reveals those companies that have 'bucked the trend' by producing really good profitability results. And those businesses within the industry that have shown good sales growth include footwear company Faith Shoes (Mail Order) with 361 per cent . The top five companies by sales turnover 1998/9 include fashion retailers Great Universal Stores Plc (£5466.6m), Littlewoods Retail (£1533.6m), Grattan Plc (£523.1m), and Freemans (£495.6m).