Merchant plans dual beauty push

Merchant Retail will embark on a long-awaited growth spurt next year, with the tandem launch of a skincare and make-up fascia on UK high streets, and The Perfume Shop in Australia.

Merchant chief executive Philip Newton said a year-long pilot in the group's Jersey department store, de Gruchy, had established demand for the cosmetics format, but the value platform has not wooed suppliers.

'The customers want it, but the suppliers are not sure about the way we propose to merchandise it,' he said. 'It was the same when we first started The Perfume Shop - the market said they were not convinced. Opening a store will convince everybody.'

Merchant will also open six Perfume Shop stores across Australia after several years researching the market.

The Perfume Shop continues to enjoy strong sales growth in the UK, with like-for-likes climbing 10 per cent in the year to March 27, but Newton warned that new stock management, warehouse and EPoS systems would disrupt sales this year. However, the chain stands to benefit from the expanding grey market, and will exploit its opportunities as they arise.

Merchant's preliminary sales rose 9 per cent to£178 million, and pre-tax profits rose 22 per cent to£16.5 million. Both Joplings and de Gruchy reported a like-for-like sales drop of 5 per cent.