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The retail brand Woolworths disappears from the UK e-commerce stage

July 23, 2015 11:17 AM
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It’s out with the very old and in with the new at Shop Direct, one of the biggest online retailers in the United Kingdom.

In June, Shop Direct, No. 10 in the Internet Retailer 2015 Europe 500 Guide  announced it was closing its e-commerce site for Woolworths, one of the oldest retail brands in the U.K. going back to 1909 and a five-and-dime store name that dates back to 1879 in the United States.

Now Shop Direct has completed the shutdown of Woolworths.co.uk, an e-commerce site that sold children's clothing, stationery and toys, and moved all inventory to Very.co.uk, a general merchandise site Shop Direct launched in July 2009.

While Woolworths has a storied history, Shop Direct, which grew web sales 9% in 2014 to $2.22 billion (1.46 billion pounds), is concentrating on aggressively growing newer sites such as Very.co.uk. “It’s a shame to say goodbye to Woolworths, but our customers are telling us that Very.co.uk is where they want to shop,” says Shop Direct CEO Alex Baldock.

Shop Direct sees Very.co.uk as an upscale online department store that caters to affluent shoppers age 25-40. By closing the Woolworths website and shifting over a base of more than 10,000 products, including its popular Lady Bird line of children’s products, to Very.co.uk, Shop Direct sees a chance to attract a bigger universe of parents of growing families who like to shop online, Baldock says.

“Woolworths was the smallest digital department store, and there was already a big crossover between the two brands with more than a third of Woolworths customers holding a Very.co.uk account,” he says.

Shop Direct didn’t release numbers for Woolworths, including annual web sales and the number of customers that will it wants to migrate to shopping on Very.co.uk. But as an incentive to Woolworths shoppers, Shop Direct is offering extended free next-day shipping in the U.K. and a buy-now, pay-later offer on orders of $155 (100 pounds) or more.

Woolworths opened its first store in Liverpool 106 years ago and at one point had more than 800 stores in the U.K. But over time the company—and the Woolworths name—went through multiple owners and bankruptcies before Shop Direct acquired all U.K. branding, intellectual property and e-commerce assets in 2009.

At the time, Shop Direct wanted to turn Woolworths into a niche e-commerce site selling such specialty items as higher-end children’s toys, apparel and related products. But now Shop Direct, which continues to operate five e-commerce sites, wants to devote more time and resources to sites such as Very.co.uk

Very.co.uk, which generated web sales of about $1.24 billion (800 million) in 2014 and accounted for 56.4% of all Shop Direct e-commerce revenue last year, is now the company’s flagship website and its future growth driver, Baldock says. Shop Direct will redirect investment from Woolworths into propelling growth at its most popular brands, Very.co.uk and Littlewoods.com, he says. “This decision [to close Woolworths] will help fuel the growth engine of this business, Very.co.uk.” 

 

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