Beauty Bay, the Manchester-based online cosmetics retailer, faced a sales decline, reporting a turnover of £75.5 million in the fiscal year ending March 2023, down from £93.1 million the previous year.
This decrease follows a notable drop from the £134 million achieved two years prior, signaling a shift in consumer behavior post-pandemic. However, it’s important to highlight that the £93.1 million turnover marked a 13% increase from pre-pandemic levels when sales stood at £82 million.
The 19% year-on-year drop is attributed to Beauty Bay’s deliberate shift in its group strategy. The focus moved away from pursuing top-line turnover, with its associated high costs, to concentrate on driving unit economics and profitability at an order level. Simultaneously, Beauty Bay continued to strengthen its market presence by developing its private label, By Beauty Bay, and introducing new products.
Despite the decline in sales, Beauty Bay showcased improved product margins, with overall gross margins increasing by 3 percentage points to 17% during the year. The company managed to deliver a comparable level of gross profit as seen in the previous year, despite the reduction in turnover.
While reporting a pre-tax loss of £5.6 million, this marks a significant improvement from the £9.3 million loss in the prior year. Other profit measures also saw improvement, with EBITDA at a loss of £3.5 million compared to a loss of £7.7 million in the previous period. The net loss for the latest financial year narrowed to £5.17 million from £7.6 million.
To stay competitive in an increasingly challenging marketplace, Beauty Bay continues to invest in its digital platforms. This strategic move aims to provide ongoing adaptability to changing market conditions and maintain differentiation in the face of growing competition.
Beauty Bay remains committed to its evolving strategy, prioritizing profitability and market adaptability despite the challenges posed by declining sales.