Skin care brand L'Occitane saw sales plummet by 15% due to the coronavirus crisis. Nonetheless, the French natural cosmetics chain was able to weather the storm with Asian growth and strong online performance.
Double-digit growth in China
Due to the coronavirus pandemic, L'Occitane lost 15% of sales in the first half of its broken financial year, from April to September. Sales reached 616.6 million euros, although there has been a discrepancy between spring and summer: in the second quarter, the drop in sales was limited to 4.5%, compared to a 22.2% drop in the third quarter.
At the height of the pandemic, 75% of the brand's 1,569 stores were closed, but strong online sales and good performance in Asia secured profits relatively well. The half-year ended with a gross profit of 32.89 million euros. One year earlier, operating profit still amounted to 41.7 million euros. Nevertheless, the gross profit margin increased by almost one per cent to 82.2%.
L'Occitane, which is listed on the Hong Kong stock exchange, also claims to have improved its cash position and managed to reduce its debt burden. This is partly down to the Chinese market, where turnover rose by 30.5%. The chain claims to have achieved fantastic growth on all its channels. On Tmall, an e-commerce platform owned by Alibaba, sales increased by approximately 15%, while sales at competitor JD even doubled. But in physical stores there were more visitors as well. The spin-off brand Elemis, launched through 125 Sephora stores, also boosted the brand.