Fragrance player Ulric de Varens posts lower Q1 sales

By Simon Pitman

- Last updated on GMT

Related tags: Market research firm, Retailing

Paris-based fragrance provider Ulric de Varens says it achieved
double-digit net profit growth in 2007, following a particularly
strong fourth quarter, but first quarter sales are down.

Revised total sales for 2007 of €51.53m, meant a rise of 10.1 per cent compared to the 2006 figure of €46.79m, while net profits grew by 10.6 per cent to reach €6.48m, the company revealed today. However, the company's first quarter figures, also published today, show a weaker start, with sales registering a fall of 8.8 per cent to reach €9.6m, compared to the corresponding quarter in 2007. The company said that this figure was impacted significantly by the fact that sales in March 2007 had been particularly strong on account of a number of new launches leading to a record month. Cost controls and good product mix boost 2007 figures ​ The strong performance in 2007 was mainly attributed to cost controls and an improvement in its product mix, allowing it to significantly improve its operating results. Indeed, operational profits for the year improved by 17.2 per cent compared to 2006 to reach €10.4m, a figure that represented 19.5 per cent of the total sales for 2007. The company stated at the beginning of this year that it was hoping to build on its growth in fragrances during the course of 2007 with the opening of a network of fragrance and beauty boutiques in France during the course of 2008. Sales growth has been strong in international markets, but in France, sales were down in 2007 by 1.5 per cent after the loss of a retail contract. French retail chain to exploit commercial gap ​ The move to open a boutique chain in France not only aims to counterbalance the loss of this retail contract but also to exploit what is considered to be a commercial gap between expensive perfumeries and supermarkets. The company says that its new chain of French boutiques will be an 'engaging and innovative' alternative to traditional perfumeries. The new shops will contain between 250 and 300 products including among traditional perfumes, children's fragrances, scented bath products, and a small make-up selection. Currently the company sells its perfumes to retailers through a network of subsidiaries. Ulric de Varens believes that its boutique strategy is likely to boost its performance in the future, and should positively impact results for the financial year 2009. The company's optimism about the opportunities present in the fragrance market is shared by the market research firm Euromonitor, which in a recent report predicted annual sales volume growth of 3 per cent until 2011. However, the market research firm warned that the US is currently an exception to the upward trend as sales fell by 4.5 per cent last year to $5.9bn (€4bn) while global sales rose 6 percent to $30.6bn.

Related topics: Business & Financial

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