L’Occitane shrugs off Covid impact as Asian sales surge
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L’Occitane International is looking to boost development in the hand care category to keep up with demands generated by the novel coronavirus (COVID-19) outbreak. The company’s fourth-quarter net sales saw a decline of 0.7% at reported rates compare to the previous year while FY2020 net sales grew by 15.2% at reported rates.
According to the company, it managed to maintain good sales momentum in January before COVID-19 impacted the business in the subsequent months due to travel bans, lockdowns, and shop closures mostly in China, Hong Kong, and Japan.
Currently, almost 75% of the company network of stores throughout Europe, the Americas, Japan, and Australia remain closed.
The company now plans to undertake certain initiatives to manage the future impact of the crisis.
“While it is too early to gauge how the COVID-19 pandemic will impact our ongoing performance, we are taking various steps to minimize the fallout from the very serious turndown in business. This includes optimizing our cost structure while ensuring that we maintain the capacity to resume growth as strongly as possible when the conditions allow,” said Reinold Geiger, chairman and CEO of L’Occitane.
The firm has observed demand for hand washes and hand creams. In South Korea, sales of those items helped to boost the company’s performance by 18.8%, making it one of the fastest-growing markets.
“Sales in our hand care category have increased as a percentage of total sales since the outbreak of COVID-19. We have seen a pronounced boost in our e-commerce sales over the past few months, partly attributed to increased overall consciousness of hand hygiene and hand care — this is a sweet spot for us,” said André Hoffmann, vice chairman of L’Occitane International.
As such, the firm plans to develop new products related to hand care and personal hygiene to keep up with the demands of the market.
“We are also adapting further to this rising demand by launching new products such as a hand purifying gel, which we feel will be a great add-on product for travel retail,”
“We are also adapting further to this rising demand by launching new products such as a hand purifying gel, which we feel will be a great add-on product for travel retail,” said Hoffmann
The company will be launching a new hand purifying gel in order to adapt to new consumer demands. The 75-millilitre bottles will be available for sale in key markets in Asia, Europe as well as travel retail.
Hoffman believes the demand for hand care products will continue well after COVID-19.
“Innovation has always been at the core of our DNA. But it is more than that. COVID-19 has led consumers to re-discover the premium hand care products that we are known for — we expect this trend to be sustained post-COVID-19 both online and offline as our physical stores around the world begin to re-open.”
In spite of the difficulties, L’Occitane remains committed to supporting the community with several relief efforts.
The group has re-directed some of its manufacturing facilities in Manosque to the production of hand sanitizer and has donated a million bottles of care products in support of healthcare workers.
“The global COVID-19 pandemic is an extremely challenging period for all of humankind. We are committed to doing everything we can to meaningfully support healthcare authorities and healthcare workers around the world,” said Geiger.
Questions & Answers
Q.What initiatives is L'Occitane taking to manage the future impact of the crisis?
What initiatives is L'Occitane taking to manage the future impact of the crisis?
The company plans to optimise its cost structure while ensuring it maintains capacity to resume growth strongly when conditions allow. They are also developing new hand care and personal hygiene products to meet rising demand.
Q.Which product categories have seen increased demand during the pandemic?
Which product categories have seen increased demand during the pandemic?
There has been increased demand for hand washes and hand creams, with sales in these categories boosting performance. The company also saw a pronounced boost in e-commerce sales, partly due to increased hand hygiene awareness.
Q.Where will the new hand purifying gel be sold?
Where will the new hand purifying gel be sold?
The new 75-millilitre hand purifying gel will be available for sale in key markets across Asia and Europe. It is also intended for travel retail, adapting to new consumer demands in those sectors.
Q.How is L'Occitane supporting the community during the pandemic?
How is L'Occitane supporting the community during the pandemic?
The group has re-directed some manufacturing facilities in Manosque to produce hand sanitizer. Also, they have donated a million bottles of care products to support healthcare workers globally.
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