Europe’s largest high street health and wellness retailer Holland & Barrett International has announced financial results showing an annual increase in sales of 11.7% and growth in profits of 12.2% for its full financial year ending 30 September 2015.
The results mark a record seven years of consecutive growth for the company (CAGR in excess of 10%), which is part of the NBTY Group acquired by Carlyle Private Equity in 2010. Sales increased from £513.6m in 2014 to £573.8m in 2015, with profit before tax up from £130m to £146m over the same period.
Peter Aldis, CEO of Holland & Barrett International, said: “This year’s performance, especially our rapid growth overseas, underlines the fact that rising consumer interest in healthier living and wellness is by no means a UK or even western phenomenon. We know from our own experience operating across 11 different territories that consumers are increasingly prioritising spending on health and wellbeing above many other demands on their wallets. Demand has continued to increase for our long established propositions in vitamins, minerals and supplements, but our investments in further developing our product ranges in sport, healthy beauty and healthy food have shown notable increases in sales and footfall across all of our stores in all markets.”
The company also announced its vision to be a £1bn turnover business by 2020, drawing on its international record of growth and its ability to leverage its position as part of the NBTY Group. Aldis said: “We are already in the top quartile of the UK’s fastest growing retailers and have the means to continue to invest in growth across not only across our UK and European network, but also in our very successful international franchise model. This in particular has enabled us to grow quickly in markets as diverse as Kuwait and Malta, Singapore and China. Our experience is that the British heritage behind our brand gives us significant advantage in our sector, and overseas consumers, such as those in China, seem to prefer the quality and reliability of our products compared with local competitors.”
The 100th franchise store milestone reached with the new store opening in the city of Taiyuan brings the total number of franchised stores in China to 34, covering 18 cities in 9 provinces. Holland & Barrett International entered the Chinese market in 2012 and has this year opened two online storefronts on Alibaba Group’s Tmall.com, China’s largest third-party B2C platform for brands and retailers, and on Tmall Global, an overseas platform and extension of Tmall.com for Chinese consumers in China.
2015 also saw some 56 new stores opened by the business, bringing the total number of stores under the brand to 1071, of which 104 are franchised. The business is also in advanced stages of negotiation with a strategic partner in India, and are hopeful that the first Holland & Barrett franchise store will open in that market next year. Growth recorded across the franchised network was ahead of Holland & Barrett International’s sales as franchisee focus on stockholding and merchandising continued to yield results.
Although the business re-branded to ‘Holland & Barrett International’ earlier in 2015 to better reflect its global reach, performance in its home market remains very important given some 744 stores in the network are located in UK and Ireland. Footfall across UK stores increased by 8% and items per basket by 2%. Like-for-like sales in the UK increased by 10.4% and further leverage of its investment in omni-channel technology supported a 27.5% increase in direct channel sales. Holland & Barrett’s UK business scored highly compared to the UK sector as a whole, with growth of 10.1% against sector growth of 0.8% measured by the British Retail Consortium. The re-brand of its Benelux division should be completed by June 2016, and early results show that Holland &Barrett rebranded stores in Holland are attracting more customers with up to 9% improvement in sales and an average increase in footfall of 5%.
Aldis said: “Our home market in the UK continues to be the first to benefit from our very healthy new product pipeline and from our continued investment in innovation. A significant development this year was the launch of our ‘Free-From’ food range and online platform, offering consumers with food allergies or intolerances such as gluten and wheat the widest range of specialist food products available in the UK, all searchable by allergen filter and all available either for home delivery or in-store collection. We will also continue our relentless focus on new technologies and driving integration across our ecommerce channels to benefit the shopping experience of both new users and loyal customers who have really made the business what it is today.”
Finally, the secret sauce to Holland & Barrett business is its people. With over 93% of its Managers across the business officially qualified to advise this means that over 93% of trading hours are now covered by someone who is qualified to advise which ultimately means a better customer service experience all round. No other retailer holds an official, accredited qualification to support their training and our brand proposition ‘Ask Us’, where customers are offered 20% off their purchase if Holland & Barrett can’t answer their questions relating to its products and popular ailments. Holland & Barrett’s philosophy ‘in pursuit of health and happiness’ unites it as a business and crucially – its customers.