Paris -- Puig Beauty & Fashion Group is on track to make its 2006 business plan, which includes doubling sales to $1.4 billion at current exchange rates, company executives say.
The family-owned, Barcelona-based group implemented a broad restructuring program one year ago that includes divvying up the firm by product category, rather than geographic location, as it had been in the past.
The main reason for the revamp was "to find synergies between brands and activities and to share corporate know-how," explained Javier Cano, Puig's chief executive officer.
The group now consists of three main divisions: Puig Prestige Beauty Brands (PPBB), overseen by Manuel Puig; Puig Fragrance & Personal Care (F&PC), headed by Carlos Iniesta, and Fashion, run by Marc Puig. Within PPBB, PPBB Barcelona includes the Carolina Herrera beauty and new beauty license brands. Its general manager is Jose Manuel Albesa. PPBB Paris, overseen by Chrystel Abadie-Truchet, comprises Nina Ricci and Paco Rabanne beauty and Payot.
The fashion division, representing 5 percent of group sales, includes Herrera, Rabanne and Ricci.
The Puig revamp has affected almost every employee since Jan. 1, 2001. Ninety percent of Puig's staff reports to new bosses and 80 percent have been given new responsibilities. Many people have moved offices and the group's main research and development facilities were centralized in Barcelona.
Puig executives feel the revamp is paying off. The PPBB division, which registers about 47 percent of company sales, closed 2001 with 7 percent growth, said Manuel Puig, who added that minus the North American business, which was hard-dashed by Sept. 11 events and the subsequent fallout, that figure would have been closer to 11 percent.
"I would like to improve our position in prestige fragrance products," he said. "The idea is to reach a number five position in prestige fragrance products."
By geographic zone, 45 percent of the division's sales are generated in Europe; about 33 percent in the Americas, and about 22 percent in Asia and the Mideast together.
"In the Americas, we need to improve [our sales] in the North," said Puig.He explained that everywhere the idea has been to bolster existing brands.
At Herrera, the focus is on launching the new fragrances Chic (see related story) and 212 On Ice for Men, and revamping Herrera for Men.
At Ricci, following the launch of the Premier Jour fragrance targeting young consumers, Puig is revamping the cosmetics line and concentrating on men's products.
At Rabanne, Puig launched Ultraviolet Man and is updating classics such as XS.
At Payot, "this year will be a year to define what the brand is all about," said Puig.
Also key to achieving the 2006 sales target is adding new businesses. These are important, particularly if the volume of older brands starts to slow. "We need to have mature brands and growing ones," explained Puig.
The company is banking on cutting-edge names to help keep the registers ringing. To that end, as reported, in late December 2001, Puig inked a license with Hussein Chalayan for his first signature scent, due out in 2003 -- at the earliest. The Chalayan brand will become part of the PPBB stable and kick off a new subdivision of trendy designer fragrances into which a second name is expected to be added soon, said Albesa.
Puig's mass market division, meantime, which represents about 48 percent of the company's overall volume, has grown exponentially over the past 18 months, due primarily to the acquisitions of Myrurgia and Perfumeria Gal. They make up 42 and 16 percent of the mass market division's sales, respectively.
The Puig brand, with 42 percent, is the third main driver in the division.
Thirty percent of F&PC's sales are rung up internationally, with Latin America taking the lion's share. Latin America is a market ripe for expansion, as is Eastern Europe, company executives said.
Some 70 percent of the firm's mass market sales are rung up domestically, as 1 out of every 4 mass market eaux de toilette sold is produced by the Puig group. It also has 25 percent of Spain's shower gel market, 32 percent of its solid soap market and 12 percent of its mass deodorant market, according to Iniesta."We will focus on two things -- speeding up international growth, [primarily through fragrance introductions] and entering new categories," he explained.
F&PC is stepping into international distribution and looking for joint-venture partners. It will launch products in two new categories for the company -- hair and sun care -- this year with items boasting high-tech attributes: Hair Tech and the Lactovit sun line. F&PC also will streamline its product offering.
Among other plans for the company at large: "I don't think we can double our sales without acquisitions," said Puig ceo Cano.
One of the beauties of a family-run firm is that there are no external shareholders to please and therefore a company can take the time to shop around for a perfect fit.
The Puig group comprises 17 family members, two of whom work in the company.
"For me, [the business] is always about a long-term vision," said Puig. "The value is the long term."
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