Fragrance Shop bounces back from pandemic with better sales and profits
The Fragrance Shop has reported increased annual sales and profits as it recovered from the impact of the pandemic and enjoyed the benefits of investment in its omnichannel strategy.
The Trafford Park-based business saw turnover rise 42.5% to £156.83m in the 53 weeks to April 2, 2022, compared with the 52 week period to March 27, 2021. The sales were also an improvement on the pre-pandemic level of £120m in the 52 weeks ended March 31, 2020.
Profits, measured by EBITDA before exceptional items, rose 68% to £27.53m, up from £16.35m, and £14.86m, pre-pandemic.
The group has continued to invest in its store portfolio, its digital platform, and enhancing the shopping experience through its subscription-based customer engagement initiatives.
The results come as the business moves from its current headquarters in Acheson Way, Manchester, into its new 190,000 sq ft head office and distribution centre at Trafford Park, a move which will underpin further expansion and support the growth strategy.
Although all stores were closed in the opening weeks of the financial year because of COVID lockdown restrictions, the impact was smaller than the previous year when there were three extended lockdowns.
Once stores reopened, they traded strongly as increased spending by customers offset the effects of reduced footfall.
As a result, underlying store sales were up 101% to the prior year and up 6.2% to 2019-20.
The strength in stores was complemented by the opening of 18 new shops as part of the continued roll-out strategy, taking the total number of locations to 215.
Online performance fell 12% to prior year, due to the huge gains made prior year due to the pandemic, but grew by129% in comparison with 2019-20.
Looking ahead, the company said it expected the retail environment to remain competitive and challenging, especially given the economic outlook, inflationary forces and ongoing pressures on supply chains.
It added: “The group has shown a robustness in trading to the challenges presented over the previous pandemic impacted years and is well placed to navigate the current uncertainty going forwards and will continue to roll out stores and expand its digital footprint.”
TFS subscription services have performed well as customers look for value in the current climate along with alternative ways to discover new and old fragrances alike.
The MyTFS membership subscription has seen a strong increase in membership numbers as The Fragrance Shop continues to focus on its commitment to enhancing consumer experience at every available touchpoint, maximising engagement, and creating a deeper relationship to drive average transaction values and repeat spend.
CEO Sanjay Vadera said: “Despite the seismic events of the past few years and current macro-economic trends, we are a business that’s in confident mood, delivering to both the top and bottom line as we spray a little happiness to our customers both in store and online.
“I want to thank our people for their commitment to the business and our customers – their resilience and entrepreneurial spirit continues to inspire me every day.”
