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PARIS — Alès Groupe plans to shutter its loss-making Phytoderm treatment brand worldwide later this year, the company announced this week.
The Paris-based firm cited failure to achieve profitability targets as the reason for the closure.
The news came as Alès reported 2007 profits down 21.6 percent year-on-year to 6.7 million euros, or $9.18 million at average exchange for the period.
That downturn was mainly a result of increased promotional spend, particularly in the first half, the group stated. Alès devoted 37 percent of its 2007 turnover of 168.3 million euros, or $230.7 million, to marketing, notably to support the launch of Lierac skin care in the U.S., where the brand is sold in 200 drugstores, and to reinvigorate stagnating sales of Phyto hair care in France. Full-year sales progressed by 4.4 percent year-on-year.
Under Lorenza Battigello, who replaced company founder Patrick Alès as managing director in February, the firm plans to boost business in Europe. Three new subsidiaries are scheduled to open by the end of 2009, according to a company spokesman. The first, Alès Groupe Portugal, will open in May this year.
Alès aims to repeat the success Battigello achieved as manager of Alès’ Italian subsidiary for 11 years. Alès Groupe Italia is the firm’s largest subsidiary, generating 37.6 million euros, or $51.5 million in 2007.
Now non-executive president Patrick Alès will focus on research and development, in particular pursuing opportunities for patents, the firm stated. Meanwhile, his son, Romain Alès, has been named president of Caron. He was previously deputy managing director of Alès Groupe. Alès confirmed its one Caron boutique in the U.S. closed last year.