Beauty retailer Neal’s Yard cuts range of products amid cash crunch

NEAL’S Yard Remedies has slashed its range of products in an attempt to drive down costs, as losses widened at the embattled beauty retailer.

The skincare and cosmetics specialist said it had made a “substantial” reduction to its product line-up, as bosses pursue a turnaround plan.

Soaring costs and falling retail sales led to losses at Neal’s Yard rising to £6m in the last financial year, up from £939,000 in 2021.

Details of the challenges facing the Dorset-based company were revealed in newly filed accounts, which said that a “material uncertainty” exists that may cast doubt on the company’s ability to continue as a going concern.

The company said it was reliant on shareholder support over the next financial year, with investors injecting £1.6m into the business earlier this summer. At the time its accounts were signed off, the company was also in negotiations over refinancing a revolving credit facility that was due to expire in November.

Neal’s Yard did not respond when asked whether it had successfully done so. Sales at Neal’s Yard Remedies have fallen in the wake of the pandemic, dropping 7.8pc to £41.6m over the year to September 2022. Barnabas Kindersley, the company’s co-owner, said this was owing to “a reduction in footfall and slow return to the high street postcovid”, as well as the impact of store closures, soaring costs and high rental prices.

Since the end of 2022, the company has kicked off a turnaround project, shaking up its leadership and cutting down its product range.

Mr Kindersley said: “Despite maintaining strong top-line sales, challenges like escalating cost of goods and heightened rents necessitated a reassessment of our strategic trajectory.”

The company’s products are a staple of middle-class bathrooms and can be significantly more expensive than those sold by bigger brands. A 50g tub of its Frankincense nourishing cream, for instance, costs as much as £33 on its website, while a 100ml bottle of its Purifying Palmarosa moisturiser costs up to £28.

As well as removing products, the company has also pulled back on promotional offers by around 60pc and closed unprofitable shops.

“Early indicators show positive outcomes from each of these actions,” said Mr Kindersley.

Neal’s Yard Remedies was founded in 1981 by Romy Fraser, an entrepreneur who gave up a career in teaching to open a shop on the small alley in central London from which the company draws its name.

She originally styled the business as an alternative pharmacy offering homeopathy products and toiletries.

It has since grown into a global beauty retailer and manufacturer, selling its products in Europe, North America and Asia, as well as Britain. It owns around 40 shops in the UK. Known for its ethical and organic credentials, its products are manufactured at a selfstyled eco-factory in Dorset.

In 2005, Ms Fraser sold the company to the Kindersley family, whose patriarch, Peter Kindersley, co-founded the publishing company Dorling Kindersley.

A long-standing environmentalist, the 82-year-old’s business empire includes an organic farm in Berkshire, complete with an eco-centre where events such as weddings, talks and conferences are hosted.

Neal’s Yard Remedies is now run by his son, Barnabas, and daughter-inlaw, Anabel.

Neal’s Yard Remedies was contacted for comment.