Tuesday, 5 May 2020

La Prairie suffers as travel retail sales slow to a trickle

Beiersdorf said on Tuesday that its super-prestige skincare brand la Prairie has taken a major hit on the back of the coronavirus crisis.

The company, which also owns the giant Nivea skincare brand, said luxury label La Prairie has suffered as international travel has all-but stopped. The brand, like much other upscale skin care, make-up, and fragrance names, relies heavily on sales to international travelers at airports and this is one retail channel that has been devastated so far this year by the Covid-19 pandemic.

Air travel is almost at a standstill and the travel retail channel that had been one of the strongest channels until this year is likely to stay weak for some time. That’s hitting the profits of a wide group of companies, from the brands themselves to the specialist travel retail chains in airports, to airlines that sell goods on board their flights and airport operators that get a big chunk of their revenue from travelers as they shop.

But while premium and prestige brands are most likely to see sales dented by the pandemic because of the travel situation, other brands that Beiersdorf owns have benefited during the crisis.

While its Q1 sales fell 3.6% to €1.91 billion, its Nivea brand — which is sold in many still-open supermarkets and pharmacies — dipped only 0.6%. And its more medicinal Eucerin and Aquaphor brands saw sales up a healthy 11.5%. Meanwhile, its healthcare business, which makes products such as Hansaplast plasters, saw a growth of 10.1%.

Sales fell 5.7% in Europe and 6.7% in Africa/Asia/Australia but rose 8.7% in the Americas.

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