The Body Shop
 “The
brand has made a big impact in its market niche
in the two years it has operated in the country.”
| Financial highlights and statistics |
|
|
|
| |
|
2003 |
2002 |
| Sales |
R’000 |
45
781 |
27
161 |
| Sales growth |
% |
68.6 |
– |
Operating profit before interest
and after
allocation of net costs of support structures |
R’000 |
10 017 |
5 176 |
| Number of stores at year end |
|
|
|
| Company owned |
|
18 |
11 |
| Number of full-time permanent employees |
|
75 |
66 |
| Weighted trading area |
m2 |
942 |
344 |
| Net increase in trading area during the
year |
% |
173.8 |
– |
| Weighted annual sales per m2 |
R |
48
600 |
78 956 |
|
 |
Positioning
The Body Shop is a truly global brand and its range of naturally-inspired
beauty products continue to be well accepted in the local market, focusing
primarily on the LSM 8 to 10 groups. New Clicks is the only corporate
internationally to manage a franchise operation for The Body Shop.
Community-traded material is used extensively in the products, with much
of the natural ingredient being sourced from local communities around
the world which helps to sustain their existence.
Review of the year
The Body Shop increased its number of stores by 7 to 18 and now has national
coverage. A concept store was piloted within a Clicks store for the first
time and this proved most successful.
Sales grew by 68.6% to R45.8 million, assisted by the store growth, while
operating profit rose by 93.5% to R10 million. The stock turn improved
from 5.3 to 5.8 times.
There was a slower than anticipated initial sales growth in the newly-opened
stores in suburban areas, owing partially to a lack of brand awareness
and to a decline in the novelty value of the brand. This was not unexpected
as the brand is perceived to be reaching maturity internationally.
In line with its philosophy of enhancing self-esteem, The Body Shop has
identified the fight against child abuse as its social responsibility
focus for the year ahead and will be sponsoring the training of counsellors
for Childline.
A portion of the sales of selected top selling products will go towards
funding this project.
Strategy
The calibre of people employed in The Body Shop is vital to its
ongoing success, and it is imperative that all staff subscribe to
the values-driven approach of the brand. Resources will be focused
on extensive training and development in 2004, with programmes covering
management, product and retail skills development.
Five new stores are scheduled to be opened during the year. As
the brand is only suited to prime retail locations, the strategy
is to grow the number of stores to around 30 over the next few years
before reaching saturation point. Expansion opportunities exist
for the concept store format within Clicks stores, and a further
four concept stores are planned for the year ahead.
A catalogue mailing and promotions strategy – aimed at heightening
brand awareness – has been instituted and initial indications
are that this is having a positive influence on sales. There is
also a strong focus on Christmas gifting which accounts for close
on 20% of annual sales.
|
|
| Store Locations |
|
| Province/City |
The Body Shop |
| Gauteng |
|
| Johannesburg |
6 |
| Pretoria |
2 |
| Mpumalanga |
1 |
| Free State |
1 |
| KwaZulu-Natal |
|
| Durban |
1 |
| Pietermaritzburg |
1 |
| Western Cape |
|
| Cape Town |
5 |
| Other |
1 |
| |
|
| Total |
18 |
|
|
The product offering is constantly being reviewed and redeveloped, and
a new range of sun care and hair care products will be introduced in 2004.
Outlook
The brand has only been operating in the country for two years and has
made a big impact in its market niche. Sales and profits are expected
to continue to grow as the store base expands as prime retail space becomes
available. The Clicks concept store format should prove to be a highly
profitable distribution channel. The challenge is to maintain the current
margin and stimulate consumer interest in the brand.
|
