Alliance Boots reported a 6.1% increase in trading profit to £1.27bn despite a 2.6% fall in revenue to £22.4bn in its full-year to March 31. Retail Week speaks to health and beauty chief exeutive Alex Gourlay.

Online sales were up 17% year-on-year, how are you developing your online offer?

It’s about being an integrated retailer and it’s about convenience. We are conveniently located because we have fantastic assets made up of 2,500 shops. There is a Boots store within 10 minutes of every customer and we have unique products.

We opened our Burton warehouse in December and that allows us to connect the shops with the online platform. It has meant we can speed up to get to next day delivery for all stores. Now, 45% of online orders are picked up in store and we’re offering great value that we can offer from shops to online and we know we will sustain profitability.

18 million people are active Advantage Card users, which means we can customise and personalise their communications.

From the UK platform we will launch the same one into Ireland next month. It will be tailored to the Irish consumer. Because it will have the Euro as its currency we will be able to make the UK sites available in other countries.

When will Boots launch its retail app?

The apps need to be very customer focused and take the lead from that. Developing apps for mobile technology is very important to us. There is more of it to come.

You have an online Boots store with Walgreens - how is that trading?

We have a separate platform for Walgreens  where Boots products are sold on Walgreens.com and its two other sites beauty.com and drugstore.com. There are about 500 SKUs on there. And we’re pleased with it.

You launched No7 in the Walgreens Hollywood flagship last year, when will you be rolling No7 out to more Walgreens stores?

We’re in four of their new flagships which have a full No7 offer with consultants. We’re really trying to understand the US market  and how we could develop our products but more importantly the category we sit in whether it’s haircare, skincare.

Once we’ve understood the American market we will start to implement trials and see how the consumer responds. It will evolve at the mid to end of this year. We’ve only got one chance, so let’s get it right.

We’ve got the partnership with target and sales were up 12% in Target stores year-on-year that’s $100m of retail sales.

How big do you think the No7 brand will be?

I honestly don’t know. Walgreens has 8,300 pharmacists and drugstores across the UK. Together we can make them even more famous and the Boots equity is very powerful, for sure.

You have pushed the food category heavily over the past year, how is it going?

Food has been fine so far. It has been about getting the quality right. We are going into it wanting to have the same standards that we have in cosmetics. So, we’re developing the supply chain. It’s all about healthy food.

It feels a bit slow because we want to get it right. We’ve got to get the value and the quality right and there will be a lot of growth over time.

Alliance Boots is set for huge future growth. Will Nottingham still be a key base?

Nottingham is the heart of Boots and it always will be. The culture of Boots as you see it yourself and the DNA it comes from being in Nottingham and it’s really important for us to be there.

But what has happened with our business in the last five years is we have become a lot more international. So one of the biggest innovation hubs is in Hong Kong where we feed into many Asian markets with some of the very best technical innovations for cosmetics and skincare. So we specialise in Nottingham in skincare in particular and we will expand that for sure and we specialise in open innovation with many partners in the UK and beyond the UK. And because we are able to offer the end-to-end,  from the IP to putting it on shelves, then we get a lot of people that want to work for us.

Our philosophy is to be successful and affordable. We don’t see ourselves as a luxury player. But we want to bring the very best innovations as fast as we can to the market under our brands and partner brands. And Nottingham is a really important part of that, but it’s not exclusively Nottingham anymore because you’ve got to be completely open to the world.

You are trialling your products in Hong Kong. Tell us a bit more about what you are doing there.

Dairy Farm are an Asian-based company who have got lots of health and beauty stores across South-East Asia and some in China  and they are probably more direct competition for AS Watson (Superdrug’s parent company) in these marketplaces. So they are a very, very important international retailer.

This trial launches 500 products into 23 stores in Hong Kong and we want to become their product partner through their retail brand Mannings. They have stores in Indonesia, India, Malaysia, and Singapore.

We’re currently in Hong Kong with our innovation centre but we’re not in retail. We were previously but we came out.

Daily Farm are a Asian-based company who have got lots of health and beauty stores across South-East Asia and some in China  and they are probably more direct competition for AS Watson (Superdrug’s parent company) in these marketplaces. So they are a very, very important international retailer.