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Hotel market helps push Arran Aromatics' revival

ARRAN Aromatics is in line to achieve a second successive year in the black under the management team that led the company back from the brink of collapse, and helped by a record order from a Saudi Arabian retailer.

SCENT OF ACHIEVEMENT: Iain Pittman, executive chairman of Arran Aromatics, expects the company to match the strong performance it reported last year.  Picture: Nick Ponty
SCENT OF ACHIEVEMENT: Iain Pittman, executive chairman of Arran Aromatics, expects the company to match the strong performance it reported last year. Picture: Nick Ponty

While conditions are tough on the UK's high streets, executive chairman Iain Pittman said the company hoped to match the performance it achieved in the year to February when it returned to profit after a long period in the red.

The company, which makes soaps and fragrances on the eponymous island, made a pre-tax profit of £122,812 in the year to February 2012, compared with a loss of £19,319 the preceding year.

Mr Pittman expects Arran Aromatics to maintain profits in the current year if it performs on plan in the key Christmas sales period.

Export markets have been "lumpy", although Arran recently won an order worth around £250,000 to supply products to a Saudi Arabian retailer with 350 outlets in the Middle East.

"This is the biggest order we have had anywhere and the first in what we hope will be a long-term relationship with the company," said Mr Pittman.

He added: "Hotels are running very well for us. The fact our products are at the luxury end, that's been fairly resilient."

The company's customer base includes the plush Cameron House hotel by Loch Lomond.

Arran Aromatics is also in talks regarding a potential contract to supply products – ranging from toiletries to fabric softener – to a prestige hotel operation based in London.

The recent success caps a dramatic turnaround in the fortunes of Arran Aromatics, which was founded by Iain and Janet Russell in 1988. Mr Pittman took charge in February 2009, a month after HMRC lodged a petition to wind up the company in respect of £180,000 underpaid payroll taxes.

After leading a programme to focus on profitable lines and to increase production efficiency, Mr Pittman believes the company has been restored to a stable footing.

He said the company had met all the obligations inherited when he took charge.

Arran Aromatics, which has 10 outlets, has used new store openings to help maintain annual turnover at around £5.2 million in the face of the slowdown in consumer spending.

The company opened a store in the Silverburn centre in Glasgow on Saturday.

The downturn has created opportunities for retailers to acquire property at cheaper rates than they would have had to pay during the boom years of the past decade.

Growth in sales from the company's outlets has helped compensate for challenging conditions in the market to supply independent retailers such as gift shops.

The company employs 51 people on Arran, out of a total workforce of 111.

Mr Pittman is confident the appeal of the company's brand and product range provide the foundation for a business that could enjoy enduring success.

After beefing up the marketing function, Mr Pittman is working on plans to capitalise on the appeal of the Arran brand among members of the Scottish diaspora overseas.

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