China, Hong Kong fuel up L’Occitane sales
China and Hong Kong were among the key contributing markets to overall growth in L’Occitane sales for its year to the end of March.
The Hong Kong-listed, French fragrance group’s net sales were €1.31 billion, up 4.6 per cent at constant exchange rates and a slight decrease of 0.3 per cent at reported rates.
Gross margin remained high at 83.3 per cent.
Operating profit and net profit were €141 million and €96.5 million respectively, both down on last year thanks to unfavourable foreign-currency translation rates and tax reform in the US. However, the operating margin was strong at 10.7 per cent.
Net sales in sell-out and sell-in segments (representing 74.9 and 25.1 per cent of total net sales respectively) increased by 4.8 and 4 per cent.
The company increased the total number of retail locations by 8.2 per cent to 3285 as at March 31. It grew its own retail stores to 1555, up 2.7 per cent.
During the year, the company added 41 own stores, including 10 in Japan (seven of them Melvita stores). China had five closings (including three Melvita stores) because of lease end and underperformance. There were four net closings in Taiwan.
The sell-out segment contributed 78.4 per cent to overall growth, mainly driven by the marketplace platforms in China and Korea. Web channels (including own e-commerce and marketplaces) grew 19.2 per cent at constant exchange rates.
The group’s same-store sales growth was mainly driven by the strong market in China together with stabilisation of same-store sales in Hong Kong.
The sell-in business segment, at €331.6 million, was primarily driven by dynamic growth in travel retail, B2B, web-partner and distributor channels.
Japan’s net sales, at €218.9 million, were down 8.3 per cent, impacted by a sluggish retail market in the second half of the financial year, plus the closing of two large underperforming stores.
Japan also closed its mail-order business, which was more than offset by double-digit growth in web sell-out channels.
Hong Kong’s net sales were up 8.3 per cent at constant exchange rates, reaching €124.6 million and contributing 17 per cent to overall growth. Sell-in sales grew by 15.6 per cent at constant exchange rates, driven by the region’s dynamic travel retail business.
China’s net sales at €159.1 million grew 14.5 per cent, or 20.5 per cent at constant exchange rates, contributing 46.6 per cent to overall growth. Sell-out sales growth was 21.6 per cent at constant exchange rates, with same-store sales growth at 15.1 per cent and marketplace growth at 75 per cent.
At the end of the period there were 197 stores, five fewer than 12 months earlier.
Taiwan’s net sales fell 5.1 per cent to €39.4 million against the backdrop of a challenging and competitive retail market. Four stores were closed during the year.
However, says the company, Taiwan is one of the markets with highest repurchase rates in the group.