Fragrance Shop sees opportunity to expand, stays profitable in pandemic year
The Fragrance Shop is planning to add more store to its UK portfolio even though some of its locations are facing challenges due to the rapid shift online of the past few years.
The Manchester-based perfumes retailer believes it’s in a strong position to exploit the “rapidly changing landscape” in British retail.
That confidence comes as the firm has filed its latest accounts — for the year to the end of March 2021 — that showed the business was fairly resilient during the first year of the pandemic, even though sales did fall. Turnover at the company fell to £109.5 million from £119.4 million in the previous year, but it remained profitable with pre-tax profits dropping only slightly to £11.6 million from £11.8 million. In a year in which it kept tight control of costs, its profits after tax were also reasonably steady with a very slight increase to £9.8 million from £9.5 million.
It has around 200 stores, all of which were closed for multiple months during the financial year and which saw significant falls in visitor traffic due to general consumer caution and other restrictions even when they were open. But trading remained good and the significant increase in online sales helped carry the company through.
The company expects the UK retail environment to remain competitive and said with the pandemic accelerating the transition to online, footfall to physical retail destinations has been severely weakened.
But while this presents challenges to the ongoing viability of some store locations, the company also sees it as an opportunity to continue to expand in other locations and grow its market share. It didn't give any specifics about shops that might be at risk or areas in which it plans to open.
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