Boots may not meet sales target for the year |
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Fri, 30 Sep 2005 13:05
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LONDON: Health and beauty company Boots Group Plc said it might not meet its sales target for the year. The company's chief executive Richard Baker said the company is no longer hopeful that it could reach its target of at least flat sales during the year.
The company had earlier hoped that there could be sales growth at its Boots the Chemist chain in the range of 0 per cent to 2 per cent during the full year.
Baker said the company would need at least 1 per cent of like-for-like growth Christmas to have a positive bearing. He was, however, confident that other targets for the year like margins and costs remained unchanged.
Boots had announced in April this year that it intends to sell its Boots Healthcare International, the OTC division that make brands like Nurofen and Strepsils. Pharma majors like GlaxoSmithkline, Reckitt Benckiser, Bayer and Pfizer have shown interest in the unit and it could fetch a price of around 1.2 billion pounds. The sale is expected to finalised by October.
The company said like-for-like sales at the 1,400 outlets of Boots The Chemist chain fell 1.6 per cent in the second quarter, bringing the same-store decline in the first half to 1.3 percent. The health products unit recorded an increase of 0.6 per cent in first half sales, while beauty and toiletries sales went up 3.3 per cent. Its so-called Lifestyle unit -- including food, photography and electrical -- had a 3.3 per cent decline in sales.
Boots Opticians sustained a 5 million-pound loss as sales fell 12 per cent because of slack consumer demand and falling prices.
Boots is the latest to join retailers like Next Plc and Woolworths Group Plc that have faced the grim situation of faltering sales mainly on account of higher fuel prices and concerns over pensions.
The Confederation of British Industry, in its latest survey, said sales volumes had fallen at their fastest rate in the report's 22-year history.
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