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Beauty Beat: Groupe Clarins Profits Hit $107M … China, Brazil Win L’Oreal Challenge

PARIS — Groupe Clarins posted consolidated net profits of 81.9 million euros, or $107 million at average exchange rates, up 170.5 percent in 2004 over 2003. The sharp increase largely reflects the cessation of the company’s Thierry Mugler...

PARIS — Groupe Clarins posted consolidated net profits of 81.9 million euros, or $107 million at average exchange rates, up 170.5 percent in 2004 over 2003. The sharp increase largely reflects the cessation of the company’s Thierry Mugler couture activities last year.

At constant exchange, Clarins’ profits spiked 189.1 percent in the period.

Excluding couture, the company’s net profits rose to 81.7 million euros, or $106.7 million, a 26.7 percent gain at average exchange and 34.4 percent at constant exchange.

Consolidated operating profits for the firm came in at 124.4 million euros, or $162.5 million, an uptick of 16 percent at average exchange, or 23.8 percent at constant exchange.

“The 2004 results can be summed up in one word — good,” said Christian Courtin, company president and chief executive officer, at a financial analyst meeting held here Friday. He added that Clarins had surpassed its objectives for 2004 despite a difficult marketplace, which included depressed economies in countries such as France, Italy and Germany; retailers’ fickleness in their placement of orders, and other negative factors.

Clarins posted top-line growth of 5.6 percent for 2004 over 2003 with net sales rising to 939 million euros, or $1.17 billion. 

Olivier Courtin, Clarins’ vice president of research and development, outlined some of the launch highlights of 2004. In skin care, these included Super Restorative Day Cream and Night Wear, which opened the mature women segment for Clarins.

There was also the White Plus line for the Asian market; Eye Revive Beauty Flash, which is billed to have “an immediate effect”; Energizing Hydra-Wear Express Body Lotion, and two new items for the Clarins Men skin care line.

In makeup, True Radiance Foundation, the Sweet Sensations colored lip balm collection and the True Emotions color line were named. For fragrance, B Men and Visit for Women were cited as key.

This year, Clarins will focus on launching three fragrances under the Clarins, Thierry Mugler and Stella Cadente brands. The cost of these introductions is expected to slightly impact the company’s operating margin next year, according to Christian Courtin, who added that the firm’s fragrance sales should rise 18 percent in 2005 over 2004.

This story first appeared in the April 12, 2005 issue of WWD.  Subscribe Today.

Last year, Clarins’ scent business reached 348.5 million euros, or $455.3 million, up 3.3 percent at average exchange and 7.9 at constant exchange.

The company also registered first-quarter 2005 net sales of 225.1 million euros, or $298.3 million, up 5.1 percent at average exchange and 6.6 percent at constant exchange. Organic growth increased 6.6 percent against the prior-year period.

Analysts were bullish on Clarins’ turnout. In fact, their mood was so jovial that many present at the financial meeting joined in singing a refrain of a comical song about changes in French accounting methods that was coined by Clarins’ financial chief, Pierre Milet. The chanson was set to an old French children’s tune.

Clarins stock closed up 2.44 percent to a unit price of 50.30 euros, or $64.93, on the French Bourse Friday.
— Jennifer Weil


China, Brazil Win L’Oreal Challenge
PARIS — Six students from China were among the winners this year of L’Oréal’s ultracompetitive e-Strat Challenge, the popular online business strategy competition for undergraduate and MBA students that serves as a recruitment tool for the French beauty conglomerate.

The team from China’s University of Business and Economics won first place in the undergraduate category, beating out Italy and Russia. In the MBA category, China snagged third place, trailing Spain and Brazil, whose team from Coppead took the top honors. A total of 4,500 students competed in the online competition, in which players make strategic decisions based on simulated but realistic market situations.

Since the program’s launch in 2000, L’Oréal has recruited 126 e-Strat players from 25 countries.