“I’m a big fan of going and doing stuff and then shouting about it,” says Holland and Barrett’s chief executive Peter Aldis.
Speaking at the health and wellness retailer’s London flagship at Marble Arch, Aldis is making a distinction between those businesses that take action and those who just talk about what they intend to do.
“Iceland makes promises of stuff it will do in five years’ time and gets massive coverage,” he says.
“Fair play to them, but I always feel if I start saying it now it’ll come across as being disingenuous. We don’t want to make a statement if we don’t know we can deliver it. I’ve got a lot to lose – the credibility of the business is crucially important for the consumer.”
“I’m usually jealous of the coverage,” he adds with a dry chuckle, conceding that Holland & Barrett needs to do “a much better job of branding, communications and really shouting about the things that matter to us”.
“We don’t want to make a statement if we don’t know we can deliver it. I’ve got a lot to lose – the credibility of the business is crucially important for the consumer”
So what is Holland & Barrett, which was snapped up by investment vehicle L1 Retail for £1.8bn last year, doing at present?
For starters, the specialist retailer has launched a ‘Cleaner Beauty’ advertising campaign to promote its pledge not to sell products with unnecessary chemical additives.
The retailer has banned chemicals including parabens, which are commonly used as a preservative, and sodium lauryl sulphate, which is added to beauty products such as shampoo as a foaming agent.
It’s part of a wider push into the beauty sector, which Aldis says has grown from nothing to £90m in sales for the retailer over the last five years.
“It’s our fastest-growing category, but more importantly it’s attracted a younger, female consumer who we’ve historically only got if they’re part of a vegetarian family,” says Aldis.
“Until recently, most women have come when they’re having children or when they start to get aches and pains and creaky joints.”
However, the rise of the ethically conscious beauty shopper has shifted this dynamic, making Holland & Barrett’s young female customers their most valuable because of their propensity for repeat visits and purchases across multiple departments.
The vegan market
On the contrary, Aldis says this trend has spurred him to develop a standalone vegan beauty store format which, he says, will “hopefully” open in the next few months.
“We started with one vegan beauty brand and we’ve grown from there – the more we’ve developed our offer, the more excited we’ve become about it as a category,” he says.
“The issue is that we can’t fit anything like the vegan beauty range that should be in our stores at this point, which is wrong because it’s become more important in terms of sales than some of our food categories, and is absolutely driving a new type of customer in.”
Holland & Barrett at present has 850 stores across the UK and Ireland and Aldis says the retailer “should have more”.
“We are still opening stores and making good returns on our investment, but we are trying to negotiate more optionality with shorter leases and tenant breaks”
This appetite for bricks-and-mortar expansion puts the health and wellness specialist in a relatively rare position on the UK high street against a backdrop of closures and CVAs.
“It worries me every time we make the decision [to open a new store],” says Aldis.
“At the moment, we are still opening new stores and making good returns on our investment, but we are trying to negotiate a lot more optionality with shorter leases and tenant breaks.”
Aldis says he does worry about the future of the UK high street in general, particularly in provincial towns.
He gives the example of Rotherham, where Holland & Barrett’s high street shop has a third of the turnover of its nearby retail park outlet and is surrounded by “three Greggs, 10 bookies, four national retailers, 17 charity shops and 15 empty units”.
Aldis says that environment is symptomatic of a retail sector in a state of distress, and he believes legislation does not go far enough in protecting local high streets.
“Where is the Government going to take its money from if the retailers don’t exist?” he wonders.
“If they up the taxes massively in places where there are shops left, it will just become an ever-decreasing circle. There’s a huge agenda here and they just don’t seem to be willing to participate or actually address the issue.”
Defying the downturn
It’s a tough time be operating in UK retail, but Holland & Barrett is defying the downturn that has blighted many other operators.
The retailer recorded its 36th consecutive quarter of like-for-like sales growth last month and, although its full-year profits declined 37% in the year to September 30, 2017, Aldis is confident in a bright future.
“L1’s plans for this business are huge. They’re not a private equity firm – they’re a long-term investment firm and there is no real demand on that investment being paid back,” says Aldis.
“We want to create a worldwide recognised brand that is synonymous with a health and wellness lifestyle”
That rare financial freedom means that Holland & Barrett is less focused on keeping things ticking over day to day – although Aldis is keen to stress that is still important – and more keen to crack on with creating a bigger retail empire.
“Our ambition is to take Holland & Barrett from being a health and wellness retailer to being a global specialist health and wellness platform.
“We want to create a worldwide recognised brand that is synonymous with a health and wellness lifestyle,” says Aldis.
His and L1’s vision for the business spans ecommerce, retail, wholesale and services across products ranging from vitamins, food, cosmetics and beyond.
“Having joined when [Holland & Barrett] was very small to taking it where it is today, I’m hugely excited for the long term,” Aldis enthuses.
The health and wellness retailer has got its warpaint on and is revved up for global pre-eminence.