The Hut Group can call itself the fastest growing retailer in the UK, followed by The Entertainer and Blue Inc. Poundworld and DiscountUK, which ranked number 2 last year, drops 26 places to find itself discounted at number 28.
Every year consulting AlixPartners conducts, in association with Retail Week, a study on the growth performance of UK-based retailers. The study, titled ‘Growth Retailer Report 2015’, compares the performance of retailers across three key dimensions: turnover, profit and profit growth*. Qualifying companies have a turnover of at least £30 million for the last three years and profits of more than £3 million in their latest accounts, as well as recording two consecutive years of growth and profit in all three years.
According to the authors, the current retail landscape is one of the most competitive in modern history, facing massive challenges in the area of among others competition (e.g. new business models), rising consumer demands (e.g. multichannel offering), capitalising on the Big Data potential (e.g. analytics and intelligence), optimising cost structures (e.g. quick delivery vs higher logistical costs) and tapping into the wave of technological advancements hitting the market. In their report, AlixPartners and Retail Week highlight the firms that have off late found the right ingredients to consumers’ favourite retail products and services, enabling them to stand out from the rest in terms of strategic vision, operating model and ultimately financial performance.
This year’s list is led by The Hut Group, a new entrant in the ranking. The in 2004 established online retailer specialising in entertainment products has been riding high, with a turnover of £184 and a two year profit CAGR** of 79%. “Having established such a scalable operating model, with a customer base that can accommodate a diverse range of brands, we anticipate an exciting future for The Hut Group”, stats the authors.
At second place comes the Entertainer, last year’s winner. The Entertainer is the largest toy retailer in the UK, with over 100 stores. Its two year CAGR stands at 64%. Blue Inc. comes in at number 3. The men’s apparel store jumps 14 spots on last year’s ranking with a strong two year CAGR of 62%. The Edinburgh Woollen Mill, new to the ranking, comes in at number 4. The specialist clothing retailer has boosted itself with various acquisitions in recent years, and the top 5 is completed by Whistles, which jumps 7 spots. The store, pandering to the upper end of the fashion market for women between 25 and 40, has a two year CAGR of 49%.
The following five see Oak Furniture Land as a new entrant on the number six position; followed by Aldi down 2 places to number 7; Charles Tyrwhitt is up 18 places to number 8; while Ikea enjoys its new position of number 9; with the Mountain Warehouse coming in as a new player to number 10. The two biggest losers in this years’ edition of the ranking are Bravissimo, falling 6 spots to 27, while Poundworld, DiscountUK falls a steep 26 spots from number 2 to number 28.
* Profit is defined as earnings before interest, taxation, depreciation, amortisation and exceptional items with directors’ remuneration added back in. Profit growth is measured by compound growth rate over three years.
** Compound annual growth rate.