Retail Giant's Profits Tumble, Forcing Urgent Action
Pets at Home has declared that immediate and necessary measures are essential to rescue its struggling retail division, following a dramatic collapse in half-year profits. The pet care retailer announced that underlying profits for its retail business nosedived by a staggering 84.1% to just £3.5 million for the six-month period ending 9 October.
A Plan to Return to Retail Roots
Interim executive chairman Ian Burke, who stepped in after Lyssa McGowan's sudden departure in September, confirmed the group is refocusing on its core retailing principles to stabilise the business. He stated the company is implementing a retail turnaround plan built on four key pillars: product, price, execution, and cost.
Mr Burke emphasised the urgency, saying, "It's clear that urgent and necessary action is needed to return the retail business to growth to meet both our own expectations and those of our investors." He revealed he has visited over 100 pet care centres to identify challenges directly, leading to the new strategic priorities.
Cost-Cutting at the Heart of the Revival
A central component of the revival strategy is a significant cost-reduction programme. The group aims to slash overheads by approximately £20 million. Measures already underway include a "leaner store operating model," with further actions planned across buying operations, store leases, and distribution automation.
The company affirmed, "We will continue to look for ways to optimise our cost base either through reducing costs or redirecting them to areas that benefit customers." This comes as the firm's overall group profits fell by 33.5% to £36.2 million, dragged down by the poor retail performance.
While the retail sector struggled, with consumer sales down 2.3% and accessories falling 5.9%, the vet business proved resilient. The vet division saw sales increase by 6.7%, with its underlying profits rising 8.3% to £44.9 million.
Pets at Home has maintained its recently lowered annual profit guidance, expecting underlying pre-tax profits between £90 million and £100 million. This is a sharp drop from the £133 million achieved the previous year. The search for a new permanent chief executive is reported to be ongoing.
