The boss of £80 million turnover Marks Electrical says household appliance prices have levelled out and even dropped due to a global glut of stock.
Mark Smithson said while inflation was running rife in other parts of the economy, manufacturers of items such as TVs, tumble dryers and washing machines had high levels of stock to offload.
Mr Smithson, who floated his Leicester-based online retailer last autumn, is confident of continuing the 44 per cent growth Marks saw in the year to March 31 –on the back of 78 per cent growth a year earlier.
He said: “We are already 20 per cent up for the first quarter of the current year which is always a very difficult time for sales – going back a few years I used to make a loss for that quarter.
“There has been an increase in the cost of living. But when I started on February 2, 1987, a Zanussi used to sell at £329. That same washing machine – a higher spec now – is £369. That’s just around £1.16 a year.
“Prices have peaked out. Through the pandemic we were being told there was zero discount on stock.
“That peaked about six weeks and there’s now a lot more stock on the market – suppliers are stuck with lots of products at docks and we are seeing some great deals.
“Those factories are still churning out products and need to sell them somewhere – so manufacturers see us as an alternative to Currys, Argos and AO which helps them spread their risk.
“We’re helped by the fact that 80 per cent of the products we sell are “distress products” – if your washing machine blows up or your fridge freezer starts leaking people come to us for next day free delivery – it’s not a luxury buy but a necessity.
“It is still very, very tough out there. We have our heads down and we are just pedalling faster. We are helped by having fantastic people working for us now.”
Marks operates out of a 200,000 sq ft warehouse near the Beaumont Leys Shopping Centre, on the outskirts of Leicester.
Mr Smithson, who still owns 70 per cent of the business, said: “Bigger premises are definitely on the cards at some point.
“We floated so that we could make this a massive company and we can get to £250 million from the current site and will keep to our single site model.
“We are in talks with developers.”
The new figures show EBITDA – operating profit after costs and adjusted to exclude the cost of the flotation – of £7.2 million.
Mr Smithson said they saw significant opportunity to build on the 1.6 per cent share of the £5.4 billion MDA – Major Domestic Appliances – market which was already up from a 1.2 per cent share a year before.
He also said he was proud that they had achieved record revenues while staying focused on margin, capital allocation and cash generation.
