Record profits announced by Lovehoney
Posted: November 10, 2017
The post-Brexit blues is not a tune being played by Lovehoney, which this week announced a rise of pre-tax profits to record levels. The firm said in a statement that the rise from £5.1million to £9 million – an increase of 76%- was due to strong website growth following the decision to leave the EU last year. Sales were up 31% – from £58 million to £76 million – with the majority of sales coming from the UK (£50 million, up 16% on last year), Europe (£6.4 million, up 51%) and the rest of the world (primarily US and Australia) where sales increased by 71% from £11.5 million to £19.8 million.
Lovehoney attributes a large part of its success to the fact that it is the only sex toy retailer in the world to develop branded licensing deals which, apart from Fifty Shades of Grey, have included collections of sex toys branded by rock bands Motörhead and Mötley Crüe and Comedy Central’s TV show Broad City, the latter of which is said to have increased sales in the US in particular.
The company said its online-only model had contributed to keeping costs to a lower level than bricks-and-mortar rivals and helped it to remain price competitive in a tough retail environment. Unveiling the results up to March 31 2017, Lovehoney co-founder Neal Slateford cited the company’s Queen’s Award for Enterprise as also being a factor in its success. He said: ”It’s wonderful to be celebrating our 15th birthday with record sales and profits and the royal seal of approval. We would like to thank the Queen for recognising our achievements – that royal recognition has really helped us to grow the brand overseas. Our online-only model gives us significant advantages over more traditional rivals and will allow us to keep prices and costs low in what is a tough period for all retailers.
“We feel the pleasure product category has been fully embraced by mainstream consumers in the last five years and whole new generation of couples are making adult toys a regular part of their sexual routine. That sea change in attitudes is reflected in our Queen’s Award and the success of branded lines with some of the world’s biggest rocks bands, Fifty Shades and a TV show in Broad City which really speaks to Millennials.”
Slateford said that sales had not been affected by the Brexit vote to leave the EU last June: “’Three-quarters of the trading year followed the Brexit vote and we have not found the political uncertainty has impacted on sales.”