L'Occitane International posts 15% revenue slump in H1
Cosmetics group L’Occitane International has been hit hard by the Covid-19 crisis which, at its peak, forced the group to close 75% of its 1,569 stores around the world. This caused the group’s sales to drop by 15.2%, to €616.6 million (and by 13.1% at constant exchange rates) in the first half of the 2020-21 financial year. Between April and September, the operating income of L’Occitane International, owner of L’Occitane en Provence, Melvita, Erborian and Elemis, was €32.89 million, compared to €41.7 million in the same period a year before.
L’Occitane en Provence, the group's leading brand, accounting for 75% of its total revenue, generated sales worth €462.3 million, down by 16.7%. Sales for skincare brand Elemis were €64.6 million, equivalent to a 23.2% decline.
The group’s ‘other brands’ segment, including Melvita and Erborian, generated a revenue of €35.2 million, for a 25.6% decrease. Only U.S. make-up brand LimeLife bucked the trend, boosted by new product launches, flash promotions and a new mobile app, propelling its sales up by 33.5%, to €54.3 million.
In France, where L’Occitane International operates 87 stores, revenue in the period reached €37.5 million, as opposed to €48.6 million in H1 2019. With sales worth €113.9 million, the U.S. remains the main market for L’Occitane, even though it recorded a 14.7% slump. In H1 2020-21, the only region in which the group grew was Asia: sales in China increased by 27.1%, to €97.4 million, and those in Taiwan rose by 19%.
Notably, online sales for L’Occitane jumped up by 80.8% in the first six months of the financial year. The group underlined that it will still face plenty of challenges in the rest of the year, and indicated that it might cut 300 jobs from among its 9,000-strong workforce.
L’Occitane International is currently restructuring L’Occitane’s Brazilian organisation, and that of Melvita, and is also in the process of rationalising its retail footprint in the U.S.
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