Creighton’s, a prominent beauty and personal care company, is currently facing its toughest year yet in terms of trading. The company recently reported a series of operational setbacks that have had a significant impact on its sales for the first half of the year. These challenging trading conditions coincided with the departure of the company’s managing director, Bernard Johnson, in November. While no official statement has been made regarding his exit, Creighton’s has already begun the process of finding a replacement. In the meantime, Philippa Clark and Martin Stevens have taken on leadership roles within the business.

The decline in half-year sales for Creighton’s can be partially attributed to major supply chain issues as well as inflationary pressures. Overall, the company experienced a 7.1% decrease in sales compared to the previous year, totaling £27.5 million. The company’s Contract division, which is the smallest segment of its business, saw the largest impact with sales plummeting by over 37% to £4.8 million. Additionally, the Branded division experienced a decline of 3.3% in sales, amounting to £10.4 million. However, the Private Label segment managed to see a sales increase of 9.8% to £12.2 million.

One of the main reasons for the decline in the Branded division’s sales was an economic downturn in a key export market. Additionally, the Contract division faced a significant reduction in orders primarily due to overstocking. Despite these challenges, Creighton’s remains optimistic that both the Private Label and Branded divisions will recover in the second half of the year as orders begin to pick up again.

The company’s profitability has been affected by supply issues and inflation, resulting in higher input and overhead costs. However, Creighton’s has introduced a six-point program aimed at restoring margins, reducing costs, lowering stock levels, and returning the business to positive cash flow. These efforts have already shown some positive results, with the gross profit margin increasing from 40.4% to 42.2%, and administrative costs decreasing by 5.1% to £9.3 million. The operating profit before exceptional costs also improved from £0.3 million to £0.5 million, and EBITDA (excluding exceptional) increased from £1.1 million to £1.4 million. Furthermore, the company’s net debt decreased from £9 million to £6 million.

These positive financial indicators demonstrate that Creighton’s is generating higher earnings from its core business operations. Once the company achieves financial stability, its focus will shift towards pursuing new growth opportunities through investments in research and development, enhancing manufacturing efficiencies, and expanding into new markets. The company is particularly interested in the key markets of the United States and China, where its leading brands Emma Hardie and Feather & Down will be prioritized. Creighton’s has already made significant investments in China by launching the Emma Hardie brand on popular digital platforms such as Tmall and Douyin. Additionally, the Feather & Down brand will soon be introduced on Amazon in the US and German markets, with the goal of securing listings with mainstream retailers. The company also plans to expand the presence of the Emma Hardie brand in these strategic areas. Overall, Creighton’s remains determined to overcome its current challenges and fully unlock its potential in the highly competitive beauty and personal care industry.

Useful links:

1. Creighton’s Official Website
2. Statistics about the Cosmetics Industry