Sales edge up for L’Occitane International
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Group net sales grew by 1.3 per cent for cosmetics and wellbeing products retailer L’Occitane International for the six months ended September 30
This figure was at constant exchange rates, being 0.9 per cent at reported rates – both an improvement from the first quarter. The company says this was mainly because of the contribution of stores opened last year and this year, marketplaces, wholesale and distribution.
L’Occitane’s emerging brands also showed encouraging growth.
Japan’s growth rate of 15.9 per cent was a result of the strengthening yen, while local currency growth in China accelerated slightly to 5.4 per cent despite severe weather creating a challenging retail environment.
Overall growth was hindered by sluggish retail sales in some markets, including Hong Kong.
The group’s net sales at reported rates were €551.7 million (US$600.7 million), up 0.9 per cent over the same period last year. At constant exchange rates, sales growth was 1.3 per cent. Both are an improvement from the first quarter.
For the six months, sell-out sales accounted for 72.6 per cent of net sales, amounting to €400.5 million, growth of 0.6 per cent. This was mainly contributed by non-comparable stores and other sales, including new and renovated stores, marketplaces, and cafe and spa businesses.
Altogether these posted 13.7 per cent growth at constant exchange rates.
“For the six months, sell-out sales accounted for 72.6 per cent of net sales, amounting to €400.5 million, growth of 0.6 per cent.”
Compared to the same period last year, the group’s eCommerce channels grew by 6.8 per cent to reach 10.1 per cent of total retail sales. Same-store sales fell 2.5 per cent through uncertainties brought by the weak global economy, threats of terrorist attacks in France and other European countries, economic uncertainties in the UK, the depressed retail market in Hong Kong as well as severe weather in some markets.
Sell-in sales of €151.1 million accounted for 27.4 per cent of the group’s total sales, an increase of 3.2 per cent over the same period last year. This was primarily driven by the dynamic growth in wholesale and distribution channels of emerging brands, in particular Au Bresil, Erborian and Melvita.
China was among the countries with highest sales growth in local currencies – 5.4 per cent, despite severe weather in the second quarter. This was mainly because of new stores, marketplaces and B2B.
With the stronger yen, sales growth in Japan was 15.9 per cent.
During the six months, the group maintained its selective global retail expansion by adding 32 stores, compared with 57 in the same period last year.
Questions & Answers
Q.What specifically contributed to the overall sales growth despite the challenging retail environment in some markets?
What specifically contributed to the overall sales growth despite the challenging retail environment in some markets?
Sales growth was mainly due to contributions from stores opened last year and this year, marketplaces, wholesale, and distribution channels. The emerging brands also showed encouraging growth during the period.
Q.Which specific factors led to the decline in same-store sales for the group?
Which specific factors led to the decline in same-store sales for the group?
Same-store sales fell due to uncertainties from the weak global economy, threats of terrorist attacks in France and other European countries, and economic uncertainties in the UK. The depressed retail market in Hong Kong and severe weather in some markets also contributed.
Q.How did L'Occitane's expansion strategy compare to the previous year?
How did L'Occitane's expansion strategy compare to the previous year?
The group maintained selective global retail expansion, adding 32 stores during this six-month period. This is a reduction compared to the 57 stores opened in the same period last year.