Warpaint first-half sales rocket on EU exports, Retra acquisition
Warpaint, the owner of cosmetics brands W7 and Technic, has announced stellar sales for the first half of the year, up 38.7% to £18.4 million driven by its expansion and the strength of its W7 make-up brand.
The company’s latest results for the six months ended 30 June showed that its sales performance benefited from the integration of Retra Holdings, a UK-based colour cosmetics company which owns three brands in addition to supplying white label cosmetics to retailers including Asda and Matalan.
This also contributed to a nearly 40% rise in Warpaint’s own-brand division, while the smaller close-out division experienced 33.2% growth. Peacocks, The Perfume Shop and TK Maxx are some of the retailers carrying Warpaint’s flagship brand W7, which grew sales by 35.3% in EU markets and by 3.4% in the US.
The UK market remained tough for retailers in the first half, but the company managed to buck the trend with sales up 26%. And revenues are expected to improve in the second half, with a “record” Christmas gifting order book already well ahead of that of the same period.
However, new hires in the Retra business and the renting of a second warehouse site to handle the Christmas gifting business resulted in pre-tax profit of £1.3 million compared to £2.9 million in the first half of 2017.
Warpaint is focused on expansion and the US is one of its main target markets, the trading update revealed. During the period, it soft-launched an e-commerce strategy and in August it acquired a US distributor for $2.16 million. Sam Bazini and Eoin Macleod, joint CEOs praised the move, saying it will “provide us enhanced access to the USA, the largest colour cosmetics market in the world worth US$11 billion”.
"The additional revenues in the second half, particularly from Christmas gifting, are expected to result in overall revenue being two thirds weighted to the second half of this financial year and with a fixed cost base that is evenly spread over the full year, we expect to deliver overall group earnings in line with management's expectations.”
The US e-commerce strategy is to be replicated in China, where it already has developed relationships with local wholesale customers, while the launch of a Very Vegan range is expected to open up new opportunities.
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