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When the going got tough for Puig, the 98-year-old family-owned Spanish fragrance and fashion business dug deep and mined its strength: storytelling.
“Our company grew a lot during the Nineties through acquisitions, mainly, and we reached the beginning of this century with declining sales and, most worrisome, deteriorating profitability to the point that in 2004 we had operating losses,” said Marc Puig, chairman and chief executive officer. “We didn’t meet the governance of our debt, the auditors didn’t want to sign the numbers. Things didn’t look good.”
Puig said the company did some serious soul-searching to identify its raison d’être.
“We were good at building brands, achieving the image of a brand through fashion, and we were at our best when translating that same image — whether ours or from somebody else — in the fragrance world,” he said.
At the time, Puig was involved in many beauty product categories and realized it had to cherry-pick what it was good at and craft an organization to best support it. The company also honed in on geographic priorities and set its sights on lassoing 10 percent of the prestige fragrance industry’s market share, the critical mass it felt necessary for survival.
“So how do you make it happen?” asked Puig. “I think the answer has to do with passion and storytelling.”
He said the beauty industry in general and Puig in particular had failed at being able to excite the consumer.
“For fear of failure for many years, we had been just bringing ‘me-too’ products,” he said. So the strategy was to again excite consumers by coming up with stories to tell them.
A case in point was the advertising film for Valentina, the Valentino women’s scent Puig launched last year in Europe and the Middle East. After signing a fragrance license with the Italian fashion label, Puig took to discontinuing all of Valentino’s former scents to “launch something that is different, with a story that can be attractive,” explained the executive.
For the Valentina campaign, the concept was to recount the story of a young woman from an aristocratic Italian family whose parents are about to throw a party for her in their Roman palazzo. It’s the last thing she wants, so she jumps out a window to celebrate with her friends.
“We tried to really capture the story in the elements of the mix.”
The storytelling strategy is bearing fruit. Over the past eight years, Puig has approximately doubled its sales. (The company closed 2011 with revenues up 12 percent on-year to 1.3 billion euros, or $1.87 billion at average exchange.)
Between 2007 and 2011, Puig grew its worldwide prestige fragrance market share from 5.1 percent to 7.6 percent, making it rank seventh, according to its estimates.
“This puts us on a good track to hopefully reach 10 percent in 2014, which is the year of our centennial,” said Puig.