Holland & Barret saw strong sales growth last year, driven by the success of its ‘transformation strategy’.
Over the 12 months ending September 2023, sales in all the health & wellness retailer’s markets rose 11% to £806.1m, while gross profit increased by 7% to £475.7m.
However, EBITDA fell from £105.6m to £81.9m, impacted by an accounting policy change intended to improve cost management visibility and the investment in its growth strategy.
Holland & Barrett revealed that it invested nearly £70m in its stores, technology and product development during the period. This included the opening and renovation of over 200 stores in the UK.
Meanwhile, in the first eight months (to May 2024) of its current financial year, sales were still growing at 11%, with gross profit also up 11%. Holland & Barrett noted that this was driven by greater volumes of vitamins and supplements.
The group achieved good growth across all its core markets, with international sales (including China, Saudi Arabia and India) up 48%, UK up 11%, Ireland up 18%, and Benelux up 11%.
Executive Chair Alex Gourlay commented: “There has been a clear shift in recent years in public perception of health and wellness, with focus shifting to preventive rather than reactive care, and people increasingly wanting to own and manage their individual health. To meet this shift, we are transforming the Holland & Barrett business: to deliver health and wellness that is easily accessible to customers in the UK and our core international markets. We are moving to a clearly defined, mission-led approach to wellness, (ranging from gut and women’s health to joint care, cognitive function and weight management) supported by qualified and personalized advice to customers, and science-backed solutions that help people’s short, medium and long-term health and wellness needs.
“The business is now in a strong financial position and our strategic investments in the last year are showing clear benefits. In FY23 we invested over £4m on the transformation of the store estate and will invest in at least one store a day in the next two years in a UK & Ireland store refresh and refurbishment programme.
“Over 63,000 hours of colleague training was delivered in the last year, to help colleagues better demonstrate and communicate the benefits and features our products to customers. We have also made excellent progress with our product innovation, launching 100 new sports transformation lines, the rollout of medicines and healthcare ranges, and ranges focused on functional mushrooms, collagen, and other superfoods.
“We have made ambitious plans to invest further in technology, training and new product and service innovations to provide customers with qualified advice. We are focused on our vision to be the trusted partner for 100 million people globally, and excited for our next stage of growth.”
Yesterday, it was revealed that Holland & Barrett has launched a new store-in-store concept with clothing and homewares retailer NEXT.
NAM Implications:
- A shift to preventive rather than reactive care opens up a whole new business opportunity in terms of potential audience size…
- …and Holland & Barrett are patently betting on this.
- However, the key question is how long before owners L1 Retail Group will be prepared to wait for a commensurate improvement in EBITDA or H&B’s bottom line.
