As an avid sailor, Jean-Paul Agon has learned from weathering past storms to keep an eye trained on the horizon.
It’s a particularly apt lesson for these times. The impressive profit and sales increases of his first two years as chief executive officer of L’Oréal were swept away by one of the worst beauty markets in decades. For 2006, profits jumped 11.9 percent to 1.83 billion euros, or $2.3 billion, on a sales gain of 8.7 percent to 15.79 billion euros, or $19.84 billion. And 2007 was another banner year. Then came 2008, when L’Oréal posted net profits that fell 26.6 percent year-on-year to 1.95 billion euros, or $2.87 billion at average exchange. The company’s full-year revenues came in at 17.54 billion euros, or $25.81 billion, up 2.8 percent. The first quarter of 2009 eked out a 0.3 percent sales gain.
But even as the recession holds its grip and archrival Procter & Gamble continues to challenge L’Oréal’s dominance, the company that helped define the modern beauty era is about to celebrate its centenary. Its 52-year-old ceo, though, is thinking ahead to the next 100 years and what it will take to sustain L’Oréal’s preeminent leadership position.
“We must prepare for what we will become after the end of the crisis, because the crisis won’t last forever,” he says, during a wide-ranging interview in his 10th-floor office in the Paris suburb of Clichy. “The big question is, what should we do in order to get out of the crisis even stronger than when we came in?”
Not only have L’Oréal’s fortunes changed in a relatively short period, but so has the industry around it. “Two years ago, the growth of the cosmetics market worldwide was at a peak, at plus-5 percent,” he says. “Now the business environment has changed completely.”
While declining to give a projection for L’Oréal, Agon ventures an opinion that the cosmetics market “as a whole will stay slightly positive worldwide this year, which would be something good.”
The question of L’Oréal’s position has become an issue of more than academic interest. Press reports have surfaced, quoting data from Euromonitor International, saying P&G has moved ahead of L’Oréal into the number-one position as the world’s largest beauty company. But once the figures are calculated to exclude product categories not traditionally counted as a classic definition of beauty — oral hygiene, bar soap, liquid soap and male and female razors — then L’Oréal remains on top globally, according to Euromonitor data. The consumer tracking firm certifi ed L’Oréal’s 2008 global ranking, with the exclusion of the four personal care categories. For 2008, the study shows L’Oréal with a 12.7 percent global share and P&G ranking second, with 9.4.
In addition, the NPD/IRI Cross Channel Monitor rates L’Oréal number one among corporations across both the prestige and mass channels in the U.S. for calendar-year 2008.
Looking ahead, Agon says he has identified the vital, core elements that drive the L’Oréal model, but there are other dynamics that need to be changed “to reinvent the company.”
His list of fundamental drivers are: L’Oréal’s focus on beauty; its quest for innovation and quality dating back to the founding days of Eugène Schueller; its international roster of brands and all-encompassing global reach; the company’s debt-free financial muscle, and, finally, its multichannel, multilayered worldwide distribution network.
Under the heading of what needs to change, Agon first zeroes in on product innovation. “We have to move more towards what I call ‘accessible innovation,’” he says, “targeting a very broad customer base.”
To that end, Laurent Attal, who has been president and ceo of L’Oréal USA for the last four years, is transferring back to Paris as executive vice president and managing director of research and innovation. He will succeed L’Oréal’s retiring R&D chief, Jean-François Grollier. In addition to spearheading R&D, Attal will oversee the year-old innovation department.
“R&D is more than ever a priority,” Agon says. “We believe in quality, we believe in innovation, and the only way to have an advantage in terms of innovation and quality is to have better R&D. That’s why we have the biggest R&D in the world, the highest ratio in terms of investment and 3,000 scientists.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)