L’Occitane grows despite weather impact and economic woes in key markets
Natural beauty and well-being company L’Occitane International has reported an improving performance in the first half despite problems with extreme weather, terrorism fears and a weak global economy. Net sales were up 1.3% in local currencies or 0.9% as reported to €551.7m in the six months to September 30.
Despite adverse weather in markets such as Japan, China and Taiwan, the company benefited from the contribution of new stores having opened 32 in the period and better wholesale turnover.
Sales in Japan grew 15.9% in the local currency as the yen strengthened, while sales in Brazil and Russia were up 20.5% and 10.6% respectively, a strong result given economic issues in both those countries this year.
In China, local currency sales grew 5.4%, despite strong competition and severe rainfall in many parts of the country, but turnover in Hong Kong continued to be hindered by slower inbound tourist traffic.
Meanwhile sales also slowed in the UK and France with the latter particularly affected by consumer worries over terrorist attacks.
Comparable sales fell slightly for the group but e-commerce growth made up for the shortfall withe 6.8% growth at constant exchange rates. E-tail now accounts for 10.1% of total turnover.
The company’s own retail sales rose just 0.6% in local currencies but accounted for almost three-quarters of total turnover at €400.5m, aided by those new stores and the e-commerce growth.
Wholesale, which makes up 27.4% of turnover, rose a stronger 3.2% in local currencies. This growth was boosted by the company’s emerging brands, including L’Occitane au Brésil, Melvita and Erborian.
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