Fragrance Sales Lift Profits at Boots
LONDON — Boots Group plc said Thursday its aftertax profits increased by more than 19 percent for the year ended March 31, to reach 304.4 million pounds, or $550.7 million at average exchange, thanks in large part to property sale and leaseback deals and record fragrance sales.

Stripping out the real estate items, the group’s pretax profits were down 13.9 percent to 315.6 million pounds, or $571 million. Group sales in the period were up 1.9 percent to 5.03 billion pounds, or $9.09 billion, while the Boots the Chemists chain saw sales rise by 1.7 percent to hit 4.73 billion pounds, or $8.56 billion.

Beauty and toiletries generated sales of 2.11 billion pounds, or $3.81 billion, through the pharmacy chain, a gain of 2.4 percent year-on-year. The firm said fragrance sales, which rose by 6.9 percent, hit an all-time high in the run-up to the holidays, with volume of more than 50 million pounds, or $90.5 million, in one week. Beauty sales were up 7.9 percent, while the toiletries segment put in its best performance in three years, growing by 2.2 percent.

Same-store footfall in Boots stores fell 3.6 percent during the year; however, the firm said two million customers joined its loyalty card program, bringing the number of subscribers to 15 million. Boots Advantage cards are used by more than half the women in the U.K., according to the company, which said 70 percent of its sales are linked to the promotion. The chain’s average basket rose 2.4 percent to reach 9.38 pounds, or $17, during the financial year.

Boots Retail International, which oversees the sale of Boots brands globally, grew 20 percent to reach turnover of 58 million pounds, or $105 million. Boots brands are available in 100 CVS and Target stores in the U.S.

“Customer feedback remains very favorable and discussions are ongoing on further rollouts,” the company said in a statement. During the year, Boots also inked a deal with M.H. Alshaya to open stores in the Middle East. Its first door there was unveiled Thursday.

As reported, during its past financial year Boots sold the Boots Healthcare International business to Reckitt Benckiser for 1.93 billion pounds, or $3.56 billion, and began the process of merging with Alliance UniChem to create Europe’s largest pharmacy retailer. The merger is expected to be completed by the end of July.
Brid Costello

This story first appeared in the May 22, 2006 issue of WWD. Subscribe Today.

L’Oréal ‘Shocked’ at Discrimination Charge
PARIS — A L’Oréal executive said Friday that the company is “very, very shocked” by allegations of racial discrimination brought against the firm in a Paris court last week by SOS Racisme, a French antiracism association. “We are shocked, indignant and saddened,” said Beatrice Dautresme, L’Oréal’s vice president of communications and external relations, noting she was speaking on behalf of the firm’s chief executive officer, Jean-Paul Agon, and chairman, Lindsay Owen-Jones. “Discrimination totally contradicts L’Oréal’s values, and the battle against discrimination is a major commitment for us.”

A French criminal court heard that when recruiting product demonstrators for L’Oréal-owned Garnier’s Fructis brand in September 2000, Districom, a subsidiary of the Adecco recruitment firm, sent a fax to its temporary employment agencies requesting candidates classed as “BBR.” The acronym purportedly stands for “bleu blanc rouge,” allegedly meaning whites.

“According to the information available, these allegations are completely unfounded,” L’Oréal said in a statement Thursday.

“The idea of making skin color a criteria is not coherent with the Fructis brand, which was one of the first to address all communities, through its products and its image,” said Laurent Dubois, who is involved in the case because he was managing director of Garnier during the period in question. Dubois, who is now managing director of Club des Créateurs de Beauté, which is 50 percent owned by the French beauty giant, said no concrete evidence had been provided to show L’Oréal had done anything discriminatory. He also noted that, in court, the Districom employee who allegedly wrote the fax said the term BBR was a personal initiative and Garnier had not asked her to include it.

“It must be pointed out that the evidence presented during the hearing May 18 related essentially to the conduct of one Districom staff member,” said Adecco in a statement. “If the ruling proves this conduct to be true, we can only condemn it.”

“This case goes against common sense; [L’Oréal] has no policy of discrimination,” said Garnier’s in-house lawyer, Jean Veil.

The maximum penalty for recruitment discrimination could be imprisonment and a fine of 45,000 euros, or $56,876 at current exchange. The judge’s decision will be announced June 1.
Ellen Groves

Malbin to Retire From CTFA
NEW YORK — Irene Malbin, a 17-year veteran of the Cos­metic, Toiletry and Fragrance Association, will retire May 31 as the organization’s vice president of public affairs.

Among Malbin’s notable accomplishments at CTFA was pairing the organization with Women Work to create Work Your Image, an eight-year-old CTFA program that “provides interview and appearance advice to help women create a professional appearance and get and keep a job,” CTFA stated. Prior to joining CTFA in June 1989, Malbin worked at the National Soft Drink Association.