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L’Occitane in Growth Mode

The French beauty group, which was listed on Hong Kong’s stock exchange in May, is now expanding on multiple fronts.

A L’Occitane boutique in Santa Monica, Calif.

French beauty group L’Occitane en Provence, which was listed on Hong Kong’s stock exchange in May, is now expanding on multiple fronts, including the U.S. and Italy.

The firm, which registered a 13.9 percent uptick in sales for the fiscal year ended March 31, generating revenues estimated at about $885.5 million, envisions eventually upping its number of stores in the U.S. to 300. Furthermore, it is rolling out a new store concept in the States.

In Italy, the brand is aiming to tap into the burgeoning Italian natural cosmetics market, which grew 5.8 percent in the first quarter and 5.5 percent in the second, by bolstering its retail presence there.

With more than 1,500 boutiques in 70 countries — the average size is 750 to 800 square feet — the company is also renovating stores, as well as scouting locations to open in growth markets China, Brazil, Russia, India and Mexico and places where L’Occitane still has room to grow, such as in the U.S., U.K., Germany and Korea, according to the company.

In the U.S., “A lot of the stores hadn’t been touched in a long time,” said Leela Petrakis, U.S. managing director, overseeing the 170 American boutiques, where 40 thus far have been recast with bright Provençal greenhouse touches of glass, weathered fixtures, mosaics and Moroccan tile, as well as warm yellow paint on stucco, instead of the earlier, more golden French country house decor.

It’s all part of L’Occitane’s renewed focus on its home manufacturing base and what inspired founder Olivier Baussan in 1976 to create soaps, moisturizers and beauty treatments using natural ingredients and local plants such as lavender, olive oil, rosemary and almonds native to the region’s Mediterranean landscape.

David Melki, managing director of L’Occitane Italy said, “For many reasons Italy was overlooked, but we have witnessed how consumers are excited by the brand from our results.”

In Italy, the plan is to open 30 freestanding stores in two years. To date, L’Occitane has opened 14 boutiques and is slated to mint a further two, in Rome Termini and Napoli station, in December. Melki noted the brand’s Rome store situated on the city’s tony Via Frattina is already one of the brand’s top-performing stores in Europe.

While retail currently accounts for 85 to 90 percent of L’Occitane’s global business, Melki said the firm is looking to cautiously grow its wholesale stake in Italy. He said he believes 45 to 50 stores and distribution in upward of 800 doors like department stores, herbal shops and pharmacies would ideally encompass the Italian market.