Scully hurls Littlewoods on to radar in bid to make retailer a household name
Managing director Geoff Scully thinks Ireland’s online market can grow as he bids to make Littlewoods a more important brand, writes Gavin McLoughlin
THE invitation to the launch of a new GAA sponsorship agreement did not say who the new sponsor was. That lent plenty of time to amuse oneself with the guessing game — which company was going to take the plunge and join major brands such as AIB and Etihad Airways in the GAA’s stable? Littlewoods Ireland would not have sprung to mind for many, but the company was revealed as new sponsors of the hurling and camogie championships as part of a three-year deal.
The price of the deal wasn’t disclosed — and nor would the company reveal it to the Sunday Independent.
However, market sources believe that the company paid close to €3m for the three-year deal. To get the most out of the endorsement, Littlewoods will probably spend an additional €2m or more on marketing and other promotional activity over the three years.
It’s an ambitious move for the online retailer, led here by managing director Geoff Scully. All he’ll say is that the company is making a “significant investment” as part of the deal.
“We’re a business that’s gone through a massive transformation in the last eight or nine years. We’re now 100pc digital. And the future of online retail is about engagement, it’s about building audiences. So on the back of that we decided to look for a sponsorship that helped us with our objectives in terms of becoming a more important brand,” Scully told the Sun- day Independent on the fringes of a glitzy launch event in Croke Park earlier this week.
Littlewoods — owned by the Barclay brothers behind the Daily Telegraph and perhaps most famous here for their row with Paddy McKillen over a series of plush London hotels — has been focusing more on developing fashion of late. It also sells white goods and electrical products such as games consoles. Recently it launched its own fashion label called ‘V for Very’ and has signed up former GAA stars Anna Geary and Jackie Tyrell as “style ambassadors”.
“It’s a defined strategy, it doesn’t mean we’re not going to promote elsewhere, but the strategy that we have is a good fit for this market,” Scully said.
“We’re on the back of eight years of difficult trading for all retailers and consumers are very much still in the mindset of being value-driven. And fashion is one area where if you get it right, consumers will buy at full price because they’re buying it for the fashion credentials as opposed to it’s the cheapest price they can get.
“So it’s about striking the right balance for the business between selling clothing and footwear that is aspirational and affordable,
and then also selling the brown goods and the white goods that everybody has, where it’s far more competitive.
“We’ve struck the right balance on that mix and it’s working really well for our business from a growth perspective and a profitability point of view.”
The most recently filed accounts for the business, covering the year to the end of June 2015, reveal turnover of €62.4m and operating profit of €2.5m.
Scully says to expect a significant increase in profitability as the fashion strategy takes hold.
“We’ve seen great growth in the last eight or nine years, but actually in the next few years we want to grow even faster. Our rate of growth is increasing significantly as we get better at what we do.
“You could say that in some markets, online retail is plateauing. It’s not going backwards but the rate of growth is slowing down. So the UK market, the rate of growth is slowing down, that’s for sure. There’s more competition, more bricks and mortar businesses are involved in online and offline selling, so there’s more competition.
“In Ireland online has a little bit of a way to go in terms of the total adoption of online retail by every retailer in the country. There are still opportunities there for us as a business over the next couple of years to really accelerate our growth.
This new sponsorship deal will play an important part in that. The company has analysed the potential financial impact of the new deal and expects it to “significantly outperform” previous sponsorships, according to Scully.
“This is another string to our bow. It’s something that was missing and so we’ve committed a decent budget towards activating the sponsorship.
“We’ve mapped it out, we’re a data driven business so we measure everything. We’ve a fair idea of what a sponsorship can do. This isn’t our first sponsorship, we’ve done TV sponsorships before. We have sponsored X Factor on TV3 and we’ve sponsored Coronation Street, but this one will bring it to a different level because of its reach and because of the family feel,” Scully says.
“So we expect it to outperform by some distance the sponsorships we’ve done in the past, and we were very, very happy with their performance.
“This one we feel will build a lot of brand equity, but we’ll also use it to drive some direct response (a type of marketing that asks consumers to take a specific action) as well. So there’s an opportunity to talk directly to that audience a lot of times during the seasons. And of course our content strategy, which is very very important now for any business because that’s where we build our audiences and we engage, will play right into all of the content that the GAA will throw up for us.”
Sponsoring such a massive cultural event is a move to the next level. Expect to hear a lot more about Littlewoods Ireland over the next three years.