THE WHAT? L’Occitane has announced an unaudited quarterly update for the period ended March 31, 2020. The group revealed that sales over the full year climbed 15.2 percent (reported; 12.8 percent constant), despite a lull in the last quarter.
THE DETAILS Indeed, sales in the three months to March 31 dipped 0.7 percent (reported; 1.6 percent constant), to €338 million, the natural cosmetics manufacturer and retailer said as retail, travel retail and B2B channels were affected by the COVID-19 outbreak.
The group estimates that the total loss of sales attributed to COVID-19 was around €56 million. It also announced a number of cost-saving initiatives to see the group through the crisis, including a 25 percent pay cut for directors and senior management, a 25 percent reduction in dividends, postponing marketing investments and cancelling or postponing planned store openings and renovations.
THE WHY? The group registered three strong quarters in FY2020 and good sales momentum in January before restrictive measures were implemented worldwide. With some 75 percent of its store network closed, the business is faced with further losses moving into fiscal 2021 although ‘significant growth’ across e-commerce, marketplace, web partners and TV channels have gone some way to compensate for the bricks and mortar decline. Reinold Geiger, Chairman and CEO, advised, “While it is too early to gauge how the COVID-19 pandemic will impact our ongoing performance, we are taking various steps to minimize the fallout from the very serious turndown in business. This includes optimizing our cost structure while ensuring that we maintain the capacity to resume growth as strongly as possible when the conditions allow. We believe that the inherent strength of our brands, our careful management and our passion for our work will lead us back to growth in the future.”