Superdrug to focus on beauty as it posts loss

The figures compare with a pre-tax profit of £21.6m the year before.

The health and beauty retailer, which is part of AS Watson, is to bring back its “Superprices” marketing campaign and maintain its focus on value.

AS Watson Health & Beauty UK chief executive Jeremy Seigal said Superdrug took a hit last year as it invested margin to clear old stock in the second half of the year.

The retailer launched its Superprices Sale in January and Seigal said that cleared about 80 per cent of the old stock.

The Superprices campaign – using a Superman cartoon character as its emblem – offered price cuts of up to 90 per cent, with some products reduced to just 10p. It also included well-known brands such as Lancôme and Clinique.

“Superprices was very successful and we have decided to relaunch it as it suits the brand and is fitting for the economic climate we are in,” said Seigal. “It’s essentially the Superman sequel.” He added that Superprices has helped lift sales. Like-for-likes are up 0.9 per cent in the year to date.

Superdrug has also agreed an £85m credit facility with a mat-urity date of June 30, 2012. The facility has been agreed with parent company AS Watson Health & Beauty UK.

The retailer has overhauled a quarter of its stores to tailor the offer to the local community, and part of the credit will be used to complete this programme.

This year Superdrug also plans to overhaul its website. “Multichannel is important to any retailer and in the past we just cobbled something together quickly,” said Seigal. “This year we will try to do it properly.”

He said Superdrug could trial  launching product lines that are only available online, and said that the website could be the right vehicle for certain brands or suppliers to test the Superdrug market before taking the plunge to go into stores.