Fragrance Shop plans for recovery by renegotiating leases

Trafford Park-based The Fragrance Shop has unveiled strong buying and selling for its monetary yr to March 31, regardless of being pressured to shut shops for the vast majority of the reporting interval.
And it revealed it has renegotiated leases on a turnover mannequin with round half of its landlords.
A major progress in on-line gross sales largely offset the anticipated decline in retailer gross sales due to the collection of enforced closures ensuing from the measures taken to handle the pandemic.
While the form of the enterprise has modified dramatically previously 12 months, accelerating The Fragrance Shop’s transformation right into a ‘phygital’ retailer, with a excessive progress digital enterprise complementing the bodily excessive avenue community, that has accelerated the enterprise’s present trajectory.
During the reporting interval the enterprise noticed Key stats abstract on-line gross sales rising by 164%, because the proportion of gross sales from its on-line channels nearly tripled from 20% of the group complete to 56%.
Overall retail gross sales on the group fell by 4.7% because the enterprise confronted a pointy drop in footfall on the town centres and procuring centres and the affect of momentary retailer closures to adjust to lockdown rules throughout the UK.
Overall, gross retail gross sales had been £128m for the yr to March 2021, whereas group EBITDA was £15.4m, pre-exceptional gadgets.
Unsurprisingly, retailer gross sales had been down 47% as The Fragrance Shop needed to shut shops for round seven of the 12-month interval.
However, within the monetary yr the enterprise nonetheless opened one new location, taking its property to 199 shops. It expects to open six extra this monetary yr, together with outlets in Cambridge and Exeter.
Despite lockdown, closed shops had been re-purposed to supply a click on and fulfil service to restrict the necessity for furlough and higher handle inventory ranges throughout the entire enterprise.
The group stated the work achieved to create a brand new digital platform in 2019 meant The Fragrance Shop was properly positioned to speed up on-line progress to fulfill demand as UK procuring habits modified quickly due to the pandemic.
And the energy of its model constructed over twenty years additionally enabled it to pivot assertively on-line. Innovations on-line which have pushed progress embody:

The ‘perfume match’ service that guides prospects by means of the massive vary of choices obtainable and helps them make the appropriate selection, whether or not they’re procuring for themselves or shopping for a present
The three-tier MyTFS membership programme providing 20% off vouchers, excusive affords and free supply is rising quickly
The integration of the ScentAddict subscription service into the principle Fragrance Shop platform now lets prospects attempt one in all 500 new scents each month for £12

However, the enterprise insists that outlets are nonetheless important.
Because shopping for perfume is a sensory expertise, The Fragrance Shop nonetheless expects a powerful, thriving retailer community to be a significant a part of its future.
The profound affect on the excessive avenue noticed shops closed for round seven out of the 12-month interval and a big drop in footfall once they have re-opened. The enterprise expects footfall on the town centres to stay subdued for a while and can adapt the enterprise to handle this new setting. It is working carefully with landlords to agree phrases that imply outlets can stay financial and a part of a recovery on the excessive avenue
It has efficiently renegotiated leases on a turnover mannequin with round half of its landlords aligning property prices to future expectations on footfall.
Despite the challenges confronted as a non-essential retailer, The Fragrance Shop has managed to modestly develop its retailer property and keep employment at pre-pandemic ranges.
Strong collaborations with model companions have helped the enterprise to take care of provides and have product in inventory. During the yr, high performing manufacturers have included Chanel and Dior as luxurious perfume continued to carry out.
Chief government, Sanjay Vadera, stated: “Unprecedented occasions have offered us with monumental challenges, however I couldn’t be prouder of the way in which everybody within the enterprise has pulled collectively to get us by means of this troublesome interval.
“A mixture of self-help and authorities assist, for which we’re grateful, has steered us by means of turbulent occasions and left us properly positioned to rebuild, because the financial system will get again on its ft.”
He added: “The work we’d already achieved on strengthening our on-line platform supplied the foundations on which we had been in a position to develop our digital supply to fulfill the dramatic change in prospects’ procuring habits. This shift to on-line procuring is barely going to develop stronger and we see this as an enormous alternative.”

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