Shop Direct reportedly up for sale

Shop Direct could be up for sale, as losses widened and the retail group’s credit rating was placed under review.

According to The Times, owners the Barclay family are analysing their business portfolio, with financial advisers set to be appointed to investigate selling parts of it.

Along with Very and Littlewoods, parent company Shop Direct, other businesses in the family portfolio include The Telegraph and The Sunday Telegraph newspapers, The Ritz hotel in London, and delivery business Yodel.

The family have not officially commented on such speculation, but it is understood that they want to complete the review within the next 18 months.

The news follows Shop Direct’s full-year pre-tax losses rising from £24.7 million in 2018 to £185.5 million over the year ending 30 June. This was attributed to £310.2 million in exceptional costs, of which £241 million comes from PPI claims.

However, the retail group recorded a 1.8 per cent increase in group revenue to £1.99 billion, while earnings before tax rose 3.3 per cent year-on-year to £271 million.

Late last week, credit ratings agency Moody’s announced that it was investigating its current credit rating for Shop Direct after the recent results.

Moody’s stated that it does not expect Shop Direct to have any issues with liquidity in the following months, with the review instead focusing on sources of funding by Shop Direct, specifically around increased customer redress payments.

It received over 276,000 PPI claims during the month, compared with a typical monthly run rate of 40,000.

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