British perfume retailer Merchant Retail today posted a 15% hike in half-yearly profits to £3.6m (€5.1m) despite a period of “great uncertainty” in which it decided to pull the plug on its department stores.
The Buckinghamshire-based group hailed the continued success of its 106-strong The Perfume Shop chain, which saw a 7% increase in like-for-like sales. It said the stores were now gearing up for a highly-competitive Christmas.
Merchant Retail, which recently sold its Joplings department store at Leamington Spa and is in the process of selling another at Tynedale Park, Northumberland, said talks were continuing on the sale of its two remaining department store outlets.
It said every effort would be made to agree a sale that would allow these sites – situated at Sunderland and Hexham – to continue trading in a bid to protect jobs.
The group said: “This has been the most challenging of starts to the year and there still remains much to be achieved.”
Merchant announced in July that it was to sell the Tynedale Park store to Tesco for £17m (€24.2m) and was seeking buyers for two other sites, in a move that could potentially affect the jobs of more than 600 workers.
The group, which generates most of its sales from The Perfume Shop, confirmed today that 180 jobs had been lost at Tynedale. It added that the earlier sale of the Leamington store had fetched a higher-than-expected price of £4.6m (€6.5m).
At the bottom line, pre-tax profits were 82% higher at £5.7m (€8.1m) once this was taken into account.
Chief executive Philip Newton said The Perfume Shop was now gearing up for the crucial Christmas period, which was expected to be highly competitive this year.
He said stores such as Boots, Debenhams and House of Fraser had “got their act together” but added that The Perfume Shop had prepared thoroughly for the challenge.
Profits at the chain fell 9% to £2.3m (€3.3m) during the 26 weeks to September 25, in line with company expectations and reflecting a number of changes. Merchant introduced a new stock and order system and an electronic point of sale system during the period.
The company opened eight new stores during the six months and plans to open another five by Christmas, taking its total to 111.