UK cosmetics sales erratic over Xmas period

By Simon Pitman

- Last updated on GMT

Related tags: Cent, Retailing, Uk

Reflecting the mixed fortunes of UK retailers in general over the
Christmas period, leading beauty retailer Boots has reported strong
beauty sales, while direct sales cosmetic player Victory and The
Body Shop reported lower than expected results.

Boots, which is currently preparing to complete a merger with Allianice UniChem, said that like-for-like sales for the third quarter ending December 31st slid 0.7 per cent at its 1,400 outlets throughout the UK, but added that beauty sales had grown by 7 per cent, mostly on the back of strong sales of its own-brand No. 7 range.

The stronger than expected beauty sales meant that the retailer beat analysts' expectations, that had been forecasting a drop in sales of 1.4 per cent.

But the retailer also exercised caution, with CEO Richard Baker claiming that the next three months would prove 'tough' as he forecast that consumer conditions would remain the same.

On the beauty front, a store revamp, discounting and the relaunch of a number of its leading beauty lines has helped Boots to fight off a more significant drop in its performance.

Not so for Virgin Group-owned Victory Cosmetics or the Body Shop, who have both reported lower than expected sales of beauty products in the high street during the all-important Christmas period.

Victory reported that like-for-like sales at its 28 retail outlets in the UK fell by 4 per cent in the months of November and December.

However, this figure was buoyed by a 22.6 per cent increase in its direct sales, which meant that overall sales for the period were up by 14.9 per cent.

In a statement the company said that it was pleased with its overall performance, despite the fact that retail conditions remain challenging. The company added that it would be plowing ahead with plans to further develop its direct selling channel.

The Body Shop also reported that high street sales growth was down during its Christmas retail period, prompting the beauty manufacturer and retailer to issue a profit warning that sent shares tumbling by nearly 20 per cent.

The retailer said that same-store sales in the UK and Ireland were up 1 per cent, compared to an increase of 5 per cent in the same period in 2004. This means that the company is expecting to post full-year profits of £40 million, compared to the £44.5 million last year.

On the plus side, the company did say that it had reported strong sales increases in its other European operations, together with the Middle East, Africa and Asia Pacific.

Related topics: All Asia-Pacific, Market Trends

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