Superdrug launches jewellery line

The British health and beauty chain Superdrug is launching an exclusive line of accessories under the True Spirit brand. The new brand will launch this week and expects to have the line in 635 of its 700 stores in the UK by mid-summer.

Superdrug - which is owned by AS Watson, part of Hong Kong entrepreneur Li Ka-Shing's Hutchinson Whampoa group - announced two months ago that it was expanding the business. The £75 million expansion strategy includes the opening of 40 new stores this year, and a target of 1000 total stores in 2009.

Although the company has always sold jewellery, it believes that True Spirit will help the chain's position at the fashion end of the beauty and health spectrum. It has not revealed the investment costs of the venture. It did say that further accessories lines like hats, bags and scarves will be available from September.

The newly promoted managing director of Superdrug, Euan Sutherland, said that True Spirit has already bad a very successful trial run in about half its stores and has surpassed its target. According to the Financial Times health and beauty companies like the ailing Boots and fashion retailers like Monsoon, which owns Accessorize, Claires, River Island and Top Shop, could be negatively affected by Superdrug's expansion.

Analysts were divided on the launch of the line. Tony Shiret of CSFB saw the sense in it: "People tend not to be so price conscious on accessories so you can still make a bit of margin on them. I suppose this will also free it a bit from the pricing pressure in toiletries." Meanwhile, Richard Ratner of Seymour Pierce, expressed his doubts: "It will take some market share from around the edges, but I think people like buying accessories in a special environment rather than in a toiletries shop." Jewellery prices will range from as little as £1 to £7. Bags, belts, hats and scarves will retail for between £4 and £15.