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The feud between the Bettencourts is getting even nastier.
The very public battle between Liliane Bettencourt and her daughter has taken a new turn, with the L’Oréal heiress vowing to sue Françoise Bettencourt Meyers for harassment.
This story first appeared in the October 12, 2010 issue of WWD. Subscribe Today.
“Once again, I have learned via the press that my daughter has again submitted the case to a guardianship judge, and that she even intends to appoint an administrator in place of my wealth manager,” the 87-year-old Bettencourt wrote in a letter addressed to the media from The Pierre hotel in New York, where she is staying.
The letter follows the disclosure last week, via the magazine Paris Match, that Françoise Bettencourt Meyers would for the third time request that her mother be put under legal guardianship. The first two demands were revoked for lack of medical evidence.
“I can no longer accept such harassment, nor the damage it is doing to L’Oréal’s image via myself or my family,” Bettencourt continued in the handwritten note, received by WWD. “I have therefore asked my attorney to take the necessary measures to ensure this harassment is condemned.”
Bettencourt did not spell out her next steps, and calls to her for further comment were not returned by press time. But her threat — if she carries it out — would mark yet another lawsuit in a string of cases working their way through courts from Paris to Nantes, France.
The letter also is the latest war of words in the long-running battle between mother and daughter over the 1 billion euros, or $1.39 billion, that Bettencourt gave to photographer François-Marie Banier. The Bettencourt scandal that now obsesses all of France and has major implications for the government of President Nicholas Sarkozy began in December 2007 when Bettencourt Meyers sued Banier over the gifts he received from her mother, alleging Banier’s “exploitation of weakness” of Bettencourt.
Since that time, the scandal, which is being played out on the front pages of France’s newspapers, has revealed Bettencourt paid L’Oréal president Lindsay Owen-Jones 100 million euros, or $136 million; that L’Oréal had a contract with Banier that paid him 710,000 euros, or $928,325, a year, which L’Oréal has since canceled, and that Bettencourt allegedly funneled money to Sarkozy’s political party via his current labor minister, Eric Woerth.
More important, the affair continues to raise questions over L’Oréal’s future ownership — and its reputation in consumers’ eyes.
Bettencourt, who has a net worth estimated at $21.61 billion, is the beauty giant’s largest single shareholder. Bettencourt Meyers already has a 31 percent stake in the world’s largest beauty company, which her mother has given her in bare ownership, while Bettencourt collects dividends and controls voting rights. Under French law, a parent cannot totally disinherit an offspring, but questions are being raised about how much Bettencourt wants to leave her daughter — especially given the increasing rancor between them.
Should she inherit all her mother’s shares, Bettencourt Meyers has vowed to maintain the status quo. Nestlé, meanwhile, owns 30 percent of L’Oréal and has an agreement that stipulates neither side can increase its stake in the beauty firm during Bettencourt’s lifetime or until six months after she dies. Analysts are divided as to whether Nestlé will move to gain control of L’Oréal or sell its shares because beauty is not part of its core operations.
Then there is the damage, if any, the scandal is causing to L’Oréal’s reputation. The company continues to grow profits and sales and its shares have escaped relatively unscathed on the Paris Bourse, fluctuating between a high of 84.89 euros, or $117.99, and a low of 71.37 euros, or $99.20, and closing Monday at 81.66 euros, or $113.50. But there are signs the feud could be exacting a toll — L’Oréal’s image has plummeted 16 places in a ranking of France’s largest 30 companies published last weekend by the Journal du Dimanche. In a telephone poll, the newspaper ranked L’Oréal in 22nd place, compared with sixth in a similar poll last March.
L’Oréal chief executive officer Jean-Paul Agon, who in the past has said the affair has had no impact on the company or its performance, admitted to the paper that he “wasn’t surprised” it was undermining L’Oréal’s image, but added he thought it was “unjust for the company and its employees.”
He also stressed L’Oréal’s sales in France remain unaffected.