NEW YORK — A seismic tremor raced through the global cosmetics industry Thursday as Lindsay Owen-Jones said that Jean-Paul Agon will succeed him next year as chief executive officer of L’Oréal, the world’s largest beauty company.
Owen-Jones will remain chairman, at least until 2006, but the anticipated change will bring to an end one of the most successful and storied careers in international cosmetics. As arguably the industry’s keenest strategist, Owen-Jones was the architect of what became the cosmetics business’ dominant player. Thursday’s announcement also represents the passing of the baton to Agon, who has one of the most stellar track records in the business.the cosmetics business’ dominant player.
Although both executives have spent their lives molding their careers in the same environment and are hard-driving competitors with a passion for the business, there are subtle differences in personality and style that could result in a dramatic cultural shift in the long run. Owen-Jones has built a near-legendary presence on the world stage, known for a charismatic approach, coupled with a demanding style but strong sense of warmth and loyalty. Guy Peyrelongue, Agon’s predecessor as president and ceo of L’Oréal USA, once said of Owen-Jones, “He never stops, and he can be very demanding of himself and others. But when things are tough, if he knows you are doing your best and you’re loyal, he will be there for you. He will never let you down.”
Owen-Jones always exhibited the intensity and mental toughness of a man who routinely relaxed by whizzing around a Grand Prix track in Formula One race cars. He finished fifth at the Le Mans 24-hour race in 1996. When he turned 50, he traded the track for sailboat racing.
This intensity also drove a vision which sparked the growth of L’Oréal into a global behemoth. As a Welshman running what he once affectionately described as “a French cathedral,” Owen-Jones instituted a far-reaching program of cross-cultural integration in the executive staff. That led to his ultimate challenge in demanding that the company provide consumers around the world with a truly multicultural beauty menu.
Agon is just as competitive and devoted, also open and demanding. But where Owen-Jones is known as charismatic, Agon is more congenially low-key and ingratiating. He also has a gusto for rolling up his sleeves and delving deeply into every aspect of a product launch, but he is no social butterfly. Agon has been known to sidestep the limelight in New York, but if the music’s good, he’s the first one to bound out onto the dance floor. He’s a strong family man who often drops his children off at school before work and believes in getting home in time for dinner.Agon also possesses the ability to poke gentle fun at himself. He loves to recount how, at age 25, he was pleased with himself at being appointed general manager of L’Oréal’s business in Greece. That was until he discovered that five others had turned the job down. In a recent speech, he said, “After I arrived in Greece, I learned that our business there was very, very tiny and very, very bad.”
The tectonic decision to change L’Oréal’s senior management actually came Wednesday, when Owen-Jones told L’Oréal’s board of directors that he will recommend to them next year that the offices of chairman and chief executive officer be separated as of April 2006. Owen-Jones, who has held both roles for the past 17 years, recommended that Agon, currently president and ceo of L’Oréal USA, take over as ceo of the global firm at that time.
During an analysts’ conference in Paris announcing the decision on Thursday, Owen-Jones, who will be 59 in March, said he will remain chairman and ceo until Agon becomes ceo in 2006. At that time, Owen-Jones will become president of the board of directors and nonexecutive chairman, helping to oversee corporate governance and strategic options for the company.
“I am keen to organize a smooth and transparent transition of the group’s management, reflecting the continuity of our results and our strategy,” Owen-Jones said in Paris. “It is my duty to initiate this transition and to ensure its success. Jean-Paul Agon is the ideal candidate. He is a natural team leader and is endowed with great human qualities. His track record has been rich, diverse and unfailingly successful. He enjoys my full confidence.”
However, Owen-Jones does not foresee the functions of ceo and chairman remaining separate in the long term. “It will be up to the board of directors to make this decision a number of years from now,” he said. “But,” he said, “the company can’t have two pairs of hands on the steering wheel.”
Thursday’s bombshell was foreshadowed in May 2002, when Owen-Jones signaled his intention to step down one day during an interview with WWD’s Beauty Biz. “By the time I’m 60, we should have pretty much identified who’s going to take the weight of this company and take it forward,” Owen-Jones said then. “By that time, I will have accomplished nearly 40 years as a L’Oréal exec. When you’ve done 40 years, the old horse feels it deserves a bit of green grass.”In that same story, WWD Beauty Biz reported that Agon would be a likely successor to Owen-Jones.
Agon is expected back in Paris by the end of this summer. “He will spend a year by my side,” said Owen-Jones Thursday. “As of 2006, L’Oréal will have a young ceo, and it will not be me.”
A successor for Agon in the U.S. has not been named, although the company said one will be named “shortly.” It is widely thought that such an announcement will come when Owen-Jones comes to New York in mid-March for his next regularly scheduled company-wide meetings with U.S. executives.
It is also widely thought that the replacement will be French and Laurent Attal — most recently of L’Oréal’s active cosmetics division in France and currently awaiting reassignment in Clichy — is said to be the front-runner. Active cosmetics is one of L’Oréal’s key directions for future growth.
L’Oréal has never put an executive in the top U.S. job who does not have significant experience across all classes of distribution, and although the U.S. organization has strong leaders on the mass, class and salon sides, none has experience that spans all of these classes.
Agon, 48, has spent his entire career at L’Oréal, having joined the company’s sales and marketing department in France in 1978 after his graduation from university. His experience, however, has been largely international. First named managing director of L'Oréal Paris in Greece in 1981, Agon took over as managing director of L'Oréal Paris in France, and in 1989 he was appointed international managing director of the company’s Biotherm brand. In 1994, he became managing director of L'Oréal in Germany, taking part in the group’s acquisition of European mass-market brand Jade, which set the stage for a later launch in Germany of L’Oréal acquisition Maybelline.
From 1997 until 2001, Agon served as managing director of the L’Oréal Group’s Asia Zone, and in that role was responsible for all business in Asia, including the company’s salon, consumer products, luxury products and active cosmetics divisions.
Agon was named president of L’Oréal USA in February 2001, succeeding Guy Peyrelongue, who was retiring. Agon assumed the role in October of that year. When Agon officially took the helm, the American economy had been shaken by the terrorist attacks of 9/11. Among the hardest-hit segments was the department store business and luxury cosmetics.With a passionate, intense management style, which some reportedly found hard to handle at times, Agon led a renaissance in L’Oréal’s U.S. business. Peyrelongue, acting with Owen-Jones, had built the division with a dazzling string of acquisitions. Agon gathered together the portfolio and moved it forward.
The U.S. business collectively passed the $4 billion sales mark last year, Agon said in a brief interview Thursday. L’Oréal chalked up an 8 percent sales increase in America last year, with all three divisions faring similarly. The standouts, however, were the professional salon and mass businesses, he noted.
Under Agon’s watch, the U.S. subsidiary has expanded its reach in the mass, class and professional products classes of business. As he took over in 2001, Agon told WWD that he categorized L’Oréal’s U.S. brands in two groups: the powerful, established brands such as Lancôme, Ralph Lauren, Maybelline, Redken, Matrix and L’Oréal, and its less-developed brands, such as Shu Uemura, Giorgio Armani color cosmetics, Helena Rubinstein, Kiehl’s, Kérastase, Garnier, Biotherm and La Roche Posay.
Despite the difficult market conditions during most of his tenure, Agon has seen more successes than failures. Although Helena Rubinstein was pulled from the U.S. market in July 2003, each of the other aforementioned brands has experienced growth.
Biotherm — which was initially introduced in the U.S. market in 1985 — revamped its approach, relaunching color cosmetics here in February 2003 and opening a freestanding California boutique this past December, among other initiatives. Agon had prior experience in turning the tide for Biotherm, having done so for the brand when he took it over in France in 1989.
At that time, Biotherm in France was a promising but troubled brand which suffered from a confused positioning. In a 2001 WWD interview, Agon recalled that its main problem was distribution. In France, it was a pharmacy brand, and elsewhere it was marketed in perfumeries and department stores. Agon decided it had a better shot in the latter, more lifestyle-oriented distribution, competing with the likes of Clinique and Clarins.
What was needed, he added in that interview, was a clear identity. “Your message has to be simple and consistent,” he said.Multicultural beauty has also proven to be a strong growth avenue, following L’Oréal USA’s 1998 acquisition of Soft Sheen and its 2000 acquisition of Carson. In 2000, months after the Carson acquisition, L’Oréal merged the operations of the two brands, and as Agon took over from Peyrelongue, he named it as one of his priorities. Under his watch, an institute in Chicago devoted to the research of ethnic hair was established, among other accomplishments. Owen-Jones had staked out multi-culturalism as one of the broad avenues of L’Oréal’s future.
Under Agon’s watch, L’Oréal also upped its 35 percent stake in Shu Uemura, which it had taken in 2000, to a 52.9 percent stake in November 2003. More doors — including more freestanding boutiques — are also planned.
“It is sad to see Lindsay Owen-Jones go, given what he has made L’Oréal into since he started the job — a much more international company with a very impressive stable of brands leading in their respective fields,” said Eva Quiroga, an analyst at UBS, on Thursday. “It is good, however, that the transition is being very well-managed, as Lindsay Owen-Jones had always promised. And Jean-Paul Agon has a great [résumé] under his belt and will secure another long tenure — which both Owen-Jones and François Dalle before him had, and which I think allows the business model to flourish.”
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