Fnac Darty introduces new strategic plan

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Electronics group Fnac Darty, also the owner of Vanden Borre, benefited from a strong online year in 2020 and wants to hold on to that applying a new strategic plan. In Belgium, for instance, they will launch a subscription service for repairs.

 

Increase in online turnover by 55 per cent

Fnac Darty's sales rose 1.9 per cent during the Covid year to 7.5 billion euros or 0.6 per cent on a comparable basis. In the fourth quarter, in particular, the electronics retailer sold significantly more - 9.6 per cent more on a like-for-like basis - despite severe lockdowns in countries like France and Belgium. As a result, the year turned into a digital one for the French group: e-commerce sales grew by more than 55 per cent and accounted for 29 per cent of all sales. 

 

Five million new active online customers made use of the website, and 64 per cent of the traffic on its sites came from mobile devices. However, what stood out for the group was its omnichannel growth: in the fourth quarter, in particular, customers were using click & collect 40 per cent more than in 2019. For the year as a whole, almost 30 per cent more click & collect orders were processed.

 

Nevertheless, the Covid crisis and all its consequences naturally cost money: net profit clocked in at 96 million euros, 19 million euros less than a year earlier. Belgium and Luxembourg did contribute 13 million euros to this operating result, one million euros more than in 2019. The region recorded a sales increase of 1.4 per cent on a comparable basis, mainly because e-commerce sales almost doubled and large household appliances also gained momentum.

 

Store becomes online hub

Fnac Darty is drawing its conclusions and is introducing a new strategic plan, Everyday, which builds on the group's previous omnichannel plan but adds another layer of sustainability. The strategy rests on three pillars: advice, sustainability and service. By doing so, the retailer aims to achieve a recurring free cash flow of 240 million euros by 2025 and return dividends to shareholders. A dividend of one euro per share is already planned for 2020.

 

Over the next five years, half of the entire investment budget will go to digital growth, in particular, to modernising and automating the logistics platform. The user experience will also improve, for example, by putting salespeople's advice "at the heart of the digital experience". Fnac Darty thus wants to involve the physical stores and the sales teams better in the online world. In the same way, all its stores should become profitable by 2025.
 

Subscription on repairs

The electro group also plays the sustainability card by focusing on repairs and extending the lifespan of products. For instance, the retailer is launching its own sustainability scores, which will rate products on reliability and how well they can be repaired. By 2025, Fnac Darty wants to repair 2.5 million products a year, which is 50 per cent more than in 2019. The group is also rolling out services for this, like the Darty Max repair service and the sale of spare parts.

 

There is also money to be made from subscriptions, so Fnac Darty is immediately turning this repair service into a third ambition: the French group wants to "become the largest provider of home assistance". It wants to do this by having a subscription-based repair service, without limits or obligations, that prolongs the product life cycle. For large household items, Darty Max laid the foundation in 2019, and the Belgian equivalent Vanden Borre Life will be launched at the beginning of this year.