Blackmores profit drops
October 23, 2013
Blackmores has revealed a
new strategy for its business in
Australia, in the face of declining
margins and a tough trading period
which has seen the company’s after
tax profit for the three months to
30 Sep slump 31% to $5.4 million.
Group sales were $85 million,
down 1%, with an update yesterday
confirming that “challenges in the
Australian retail market continue.
“Our Australian retail sales are
down 7% compared to our record
quarter the previous year,” the
company said, citing intense pricing
pressure which has “intensified
as many of our competitors face
financial restructuring or sale”.
Blackmores says there’s also
been a significant slowdown in the
category as well as destocking by
retail customers.
And the “continued growth of a
major discount pharmacy whilst
community pharmacies and health
food stores are declining, adds to
the challenges,” the firm added.
In response, the company has
announced the appointment of
David Fenlon as Managing Director
for Australia and New Zealand,
reporting to ceo Christine Holgate.
Fenlon, who’s been with the
company since March, has
significant retailing experience
having held senior roles with Tesco
in Europe and Safeway in the UK
before heading up Red Group, the
parent of the defunct Borders and
Angus & Robertson’s bookstores, in
Australia.
Blackmores says as well as
strengthening local management
it will undertake more brand
marketing and review its cost
structures to help it adapt to
market conditions in Australia,
which “will have lower margins
going forward than we have
previously had”.
The company has also “refreshed”
its board, with the retirement of
long-standing director Bon Stovold
and the appointment of Helen
Nash and David Ansell as new nonexecutive
directors.
Going forward, key priorities for
Blackmores include supporting
the Australian business while
“building our consumer brand,”
investing in its operations in Asia
as well as BioCeuticals for further
profitable growth, transforming
the cost profile and simplifying the
organisation.
“We strongly believe in the overall
prospects for Blackmores [and]
adapting the company to meeting
the market dynamics is well under
way,” the Blackmores board said.
The above article was sent to subscribers in Pharmacy Daily's issue from 23 Oct 13To see the full newsletter, see the embedded issue below or CLICK HERE to download Pharmacy Daily from 23 Oct 13
