Exotic formulations boost Body Shop sales

By Simon Pitman

- Last updated on GMT

Related tags: Body shop, Generally accepted accounting principles, Marketing

Body Shop International said that its latest results for the six
months up to 27 August showed new lines featuring exotic community
trade ingredients such as Brazilian babbusu nut oil and Zambian
honey have been a major driving force behind a 4 per cent growth in
like-for-like sales.

The company has launched a new series of products containing the distinctive ingredients in an effort to underpin its 'masstige' brand repositioning. This concept aims to combine mass market products with a prestige positioning.

Other lines that the company said proved to be important during the six month period included the Passion Fruit Bath and Body range, seasonal summer and autumn limited edition make-up collections and three additional new lines in the Vitamin E skincare range.

Sales from the 2085 stores now located in 53 different countries came in at £327.4 million ($571.7m), reflecting 18 months of consecutive improvements that follow a long period of disappointing results.

However, both operating profit and net profit figures did not look so rosy. Operating profit fell 9 per cent to reach £8.9 million. The company said that this figure was down on account of acquisitions in previously franchised markets in Canada, Hong Kong and Benelux. Because of this sales in these markets moved from wholesale to retail sales in the second during the period.

Pre-tax profit fell by 13 per cent to reach £7.1 million, however, the company pointed out that this was in line with expectations and that the figure was weighed down by the fact that second half sales are usually much more robust due mainly to the Christmas holiday season.

Body Shop​ CEO Peter Saunders also pointed to the fact that the company's expansion beyond the domestic UK market has proved highly successful in insulating it operations from the retail slowdown in the UK market.

On a regional basis comparable store-by-store sales were flat in the Americas, and up by 6 per cent in Both the Asian and European regions.

New stores are planned for India, China, Jordan and Russia, where significant market potential is expected to be realised quickly. Saunders pointed out that the first store will open in Moscow by the end of this year, with a further seven stores due to open up in various locations during the course of the year.

The company said that discussions to open its first stores in India are currently on-going.

The company said that comparable store sales up to October 8 were up 4 per cent, suggesting that its proposed full year earnings will be in line with its expectations. However, the company did emphasise that both the US and the UK markets will continue to prove challenging in view of the unfavorable economic conditions.

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