Victory warns on tough trading
Virgin businesses facing consumer downturn
Victory Corporation, the parent company for the Virgin Cosmetics and Virgin Ware lingerie businesses, has been hit by a challenging retail market as the key Christmas sales period approaches.
Victory said that after ‘reasonable’ sales growth of 11 per cent in the six months to September 30, sales in October were poor and “contrary to our considered expectations”. A trading statement added that the trend continued into November, “our most important trading month”.
The company said: “Having achieved high levels of sales growth for a number of years, the shortfall in sales has been within Cosmetics Direct where consultant recruitment and activity has been slower than anticipated.
“Consumer spending in both direct and retail has been very tight, and in line with the current poor sales performance being experienced by many major retailers in the lead up to Christmas.”
Victory warned that net profits for the current financial year “will be considerably below market expectations and lower than last year.”
[img r]virginvie.jpg[/img]In response, the group said it is bringing forward strategic options that have been under consideration, as well as plans to grow the business through new product development. Details of the initiatives will be given when the company announces interim results on December 16.
Virgin Cosmetics makes the majority of its sales through its network of consultants selling directly to customers. It also operates 23 stores, including 11 Virgin Spa outlets, as well as mail order and internet sales.
