Decreased consumer spending has continued to have a negative affect on high street health and beauty retailer Boots. The chain has reported a drop in sales and says that it sees now signs of a market recovery. Chief executive Richard Baker furthermore refused to repeat the company’s full-year sales guidance, stating that the market would have to make its own projections.
Like-for-like sales at Boots the Chemists were expected to have dropped 1.3 percent for the first half due to the persistently tough retail climate. Although sales of health and beauty and toiletry products were promising, categories such as food, photo and electrical saw a decline in sales.
“Trading conditions have been difficult throughout the first half with consumer spending softening further over the last quarter and we see no sign that the market will get any easier for the rest of the year,” Baker said.
Baker has said that Boots needs to reinvest in the business and focus on re-establishing the retailer as the leading health and beauty expert, which is its core business. To this end, the company decided to put Boots Healthcare International (BHI) up for sale earlier this year.
BHI manufactures and sells over-the-counter products like Strepsils, the throat lozenges. The FT reports that the groups such as Reckitt Benckiser, GlaxoSmithKline and German Bayer are understood to have shown interest.
The company said the sale of BHI, which could fetch between £1.5 billion and £1.6 billion, was on track. Furthermore, it said sales for the second quarter at the division were expected to climb 9 percent. In the meantime Baker said that Boots would concentrate on managing its trading margin, costs and working capital.
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