AO World, the online white goods and electrical retailer, has reported a full-year loss at the bottom end of expectations as a result of tough trading in Britain and challenges in Germany.
Commenting on AO World’s full-year results, Julie Palmer, partner at RBR Advisory says:
“Since retaking the reigns at AO World, founder John Roberts has been faced with the daunting task of preparing the electrical retailer for the potential fall-out from a no-deal Brexit and dealing with a shrinking market as consumers curb their spending on big ticket items.
“To tackle these issues, Roberts has led a management restructure to add a new spark to the business and improve efficiencies. The investment in this restructure, as well as the costs of stockpiling popular goods ahead of the original Brexit date, has meant AO has taken a hit in its profits. But the company is hoping to regain this investment with the launch of a new rental service as a means of targeting those who cannot afford to purchase a major electrical product and the acquisition of Mobile Phones Direct, a new market for the firm.
“Roberts may have had to sacrifice a portion of profits to reinvest in the business, but employees and shareholders will be hoping this means AO World is now strategically placed to enter new market streams, increase its resilience and revenue to reclaim the market share it has lost in recent years. In a retail world which is starting to consider that online is a cure for all ills, seeing a major, online only brand having to change direction to pick itself back up proves that this is not the only answer. However, the versatility of the model should give those invested personally and financially in the business hope for the future.”