L’Occitane International S.A. has reported its annual results for the year ended March 31, 2020.
Despite the unprecedented COVID-19 crisis and the corresponding restrictive measures, such as travel bans, lockdowns and shop closures in some of the group’s key markets, L’Occitane recorded net sales of €1,644.1 million ($1,847.4 million) in FY2020, an increase of 15.2% compared to the previous year.
“Despite the tremendous challenges posed by COVID-19, our teams have responded with great resilience and solidarity, and managed to maintain sales growth and improve operating profitability for the year,” commented Reinold Geiger, chairman and CEO of L’Occitane.
The sales momentum of the group’s core L’Occitane en Provence brand was robust in the first three quarters of FY2020, with 6.0% growth at constant rates. However, after the outbreak of COVID-19 in FY2020 Q4, traffic dropped significantly, seriously affecting the retail business in China, Hong Kong and Japan as well as the Travel Retail business in the region.
Store closures started in China in late January, after which widespread store closures were seen across Europe and the Americas since mid-March 2020. The loss of sales in brick and mortar was partly recovered by a sales boom in e-commerce and marketplaces. Sales of L’Occitane en Provence decreased by 12.1% in FY2020 Q4 yet ended the year with a growth of 1.7% at constant rates.
Elemis, the group’s second-largest brand, recorded €165.8 million ($186.3 million) in sales, accounting for 10.1% of total sales. The brand performed well in the UK and the U.S., especially in e-commerce, despite the sluggish performance of the maritime business. LimeLife posted a sales decline of 2.7% at constant rates for FY2020, mainly affected by the rebranding exercise last year, teething pains from new market expansion, as well as the COVID-19 outbreak in FY2020 Q4. The group’s other brands grew 1.0% at constant rates in FY2020, with Erborian posting double-digit growth for the year.
In terms of geographic areas, the UK and the U.S. were the group’s fastest-growing markets during FY2020, growing 163.0% and 22.3% respectively. In China, the group’s sales momentum was strong in the first three quarters of FY2020, thanks to the various campaigns with celebrities and a strong focus on web channels. However, sales declined sharply following the outbreak of COVID-19 in January 2020 and only started to pick up in March 2020 as the lockdown measures were uplifted gradually. Web-based channels, on the other hand, rebounded quickly.
“In the short-term, we will continue to take steps to better control our cost structure amid the uncertain environment. This will leave us well-placed to emerge even stronger following the pandemic,” added Geiger. “We firmly believe the inherent strength of our brands, products and web-based activities will enable us to safeguard our profitability while continuing to deliver value to our shareholders.”