Sales shrank in the final quarter bringing turnover for 2008 up to only €46.4m compared to €51.5m in the previous year.
Mass distribution suffers
Ulric de Varens placed much of the blame for the falling sales on the contraction of the mass distribution sector.
In a statement, Ulric de Varens also said: “Perfume, to the extent that it is not a product of primary necessity, was particularly affected, in France and abroad.”
The company suffered in particular from the failure of a distributor in Russia and the loss of a client who had represented 13 per cent of French sales.
Although declining consumer spending was a major factor behind the sales figures, Ulric de Varens said it had observed a downturn in its traditional business since the beginning of 2008.
Sniffing out retail opportunities
The company therefore decided to launch a network of perfume shops in France in the second half of 2008 to exploit what it considers to be a commercial gap between expensive perfumeries and supermarkets.
So far 8 boutiques have been opened including the latest one in La Defense, Paris, earlier this month and all the products are sold for between €3.70 and €19.90.
The company said its new business model suits the current economic environment in which the consumer is looking for the best relationship between pleasure and price.
Ulric de Varens said the contribution of its retail stores to sales would become really effective from the beginning of the second half of 2009.