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The Times   
  Friday 31st May 2002

Earlier this week a little-known retailer that operates The Perfume Shop, the discount fragrance chain, came up with a set of results that Boots could only dream of.

Merchant Retail, which also runs a couple of department stores, revealed a 31 per cent increase in full-year pre-tax profits to £10.6 million, on sales ahead by 14 per cent to £128 million. The Perfume Shop chain, which comprises 75 outlets, saw comparable sales growth of 14 per cent.

What is iencouraging about this company is its potential. In the UK the management reckons it is possible to double the number of perfumeries. Further, it has not gone unnoticed on Philip Newton, the chief executive, that he operates the only chain dedicated to fragrances in the whole of Europe, so his next stop is the Continent. He plans to make a “modest investment” in Western Europe before the year is out, in order to test the waters.

Newton is also turning his attention to the cosmetics and skincare market, which, with annual sales of about £2 billion, is four times the size of the fragrance market in the UK. He believes that shoppers will welcome the same sort of discounting and make-up that they do on perfumes and will experiment with a store in Jersey from November. He admits it took three year to get the formula right at The Perfume Shop, so he is warning investors not expect miracles, but he is a canny retailer.

The shares, off 1½p to 149p, trade on a multiple of 17 times this year’s forecast earnings of £12.9 million. The rating is racy, especially given the prospect of interest rate rises and the subsequent impact on consumer spending, but Newton is worth backing. Buy.



Article from The Independent, 31st May 2001   
  04 June 2001

MERCHANT RETAIL, owner of The Perfume Shop, was one of the City’s favourite scents yesterday as its shares hit a 12 month high on the back of stronger than expected results.

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