New store openings and online investment underpin growth
Move into new HQ and fulfilment centre lays foundations for future expansion
The Fragrance Shop today (27 October) reported increased annual sales and profits as it bounced back from the impact of the pandemic and reaped the benefits of investment in its omnichannel strategy.
The Fragrance Shop has continued to invest in its store portfolio, its digital platform, and enhancing the shopping experience through its subscription-based customer engagement initiatives – providing a compelling proposition for consumers however they choose to shop.
The Manchester-based company’s results come as it moves into its new state-of-the-art low carbon headquarters and distribution centre at Trafford Park, a move which will underpin further expansion and support the growth strategy.
Financial results
The UK’s largest independent fragrance retailer saw total turnover rise 42.5 per cent to £156.83 million in the 53 weeks to 2 April 2022, up from £110.04 million in the 52 weeks to 27 March 2021 (and up from the pre pandemic level of £120 million in the 52 weeks ended 31 March 2020). Profits measured by EBITDA before exceptional items rose by 68 per cent to £27.53 million, up from £16.35 million and £14.86 million pre pandemic.
Performance
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 per cent to the prior year and up 6.2 per cent to 2019-20.
The strength in stores was complemented by the opening of 18 new shops as part of the continued rollout strategy, taking the total number of locations to 215.
Online performance fell 12 per cent to prior year (due to the huge gains made prior year due to the pandemic) but grew by129 per cent in comparison to 2019-20.
Outlook
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.
Scent Addict, The Fragrance Shop’s discovery service allows customers to try fragrance before they buy quickly and easily straight to their door, with subscribers to the service doubling over the period.
Fragrance Match also continues to be popular tool with customers, customers answer a few simple questions to gain tailored fragrance match recommendations for themselves or person to whom they are gifting.
Dior Sauvage remains the leading male fragrance with Chanel Coco Mademoiselle the number one female fragrance.
The Fragrance Shop has now raised more than £1.6 million for children’s charities through its Spray a Little Happiness Foundation.
It supports local and national children’s charities, including a long-standing partnership with Rays of Sunshine which brightens the lives of children living with serious or life-limiting illnesses.
Among the many fund-raising events and campaigns in 2021-22 was a two week “happiness takeover” in stores in partnership with Rays of Sunshine.
Events included turning its Westfield White City store into “The Happiness Shop” and a visit by singer Pixie Lott to surprise the Rays of Sunshine Wish Choir.
During the year, The Fragrance Shop also raised £3,000 for the Mermaids charity, supporting gender diverse and transgender children.
CEO Sanjay Vadera MBE 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.”
Investment in new HQ and distribution centre
In a signal of its confidence in its strategy, during the year The Fragrance Shop agreed a lease on a new HQ and fulfilment centre in Trafford Park, Manchester.
It has begun the move from its current headquarters in Acheson Way, Manchester. The new 190,000 sq ft head office and distribution centre uses carbon cutting technologies including air source heat pumps and more than 6,000 sq ft of solar panels.
