The affable Christian Courtin-Clarins, who helped take his family-founded Groupe Clarins private in July, is steering the company onto a more focused course, aimed at building core brands and gaining market share in the U.S. and Japan.
In addition, the company, which acquired 800 million euros, or $998.5 million at current exchange, in financing to delist the company from the Paris Bourse, has begun belt-tightening by reducing executive travel and paring promotions.
During a recent interview in New York following a press preview of Clarins’ new product lineup for spring, Courtin-Clarins said the global financial collapse will not deter him from his previously announced plan to invest in the U.S. market. But the money is being earmarked for bolstering his core brands, not shopping for an acquisition, as had been previously suggested.
Reiterating his previously stated goal of becoming “the leading skin care company in the world,” he noted that Clarins lags far behind that vision in the U.S., where the company ranks fourth with a market share of 5 percent. “It’s mandatory to invest in the market, even if it is not good timing,” he said.
But he plans to spend the money while focusing on the company’s strengths. “In the past, we came out with too many ideas without focusing on the strongest ones enough,” Courtin-Clarins added. “We were a little bit too [much like a] butterfly in our marketing strategy.”
“We want to focus on Clarins, Thierry Mugler, Azzaro and David Yurman. But mainly to focus on our main [Clarins] brand. We don’t want to dilute. We have a 16 percent share in the European market. Here we have only 5. So before I go to another line I will try to bring Clarins to a minimum of 16. The strategy is to focus, focus, focus on our brands,” he said, explaining that the investment would take the form of “marketing, sampling, training and advertising — all what I call the communication. Merchandising is also involved in this.”
Asked about his earlier ideas about possibly acquiring another brand, Courtin-Clarins said the right brand could not be found that would justify the steep prices being demanded by the market. “Until we find one, we can invest in our own brands,” he said. But then Courtin-Clarins discovered a catch. “The stock market does not like it when you invest in your own brands because if you say, ‘I’m going to invest in my brand,’ they understand that you are going to make less profit and they penalize you strongly.
“My strategy was to go stronger,” Courtin-Clarins continued. “But I realized that to go stronger I was not able to invest on my Clarins line. So we decided with [my brother] Olivier [vice president of research and development] that it was time to go [private]. He added that the move was also hastened by escalating rumors that the company was up for sale.”
Courtin-Clarins also apparently has scrapped thoughts about launching into third-party retailing through his joint venture with L’Occitane.
“Now we have a minority [holding] in L’Occitane,” he said. “I think that they want to go to the stock exchange in Hong Kong, and if they succeed we will suddenly sell our share, or we will sell to them, we don’t know yet.
“The joint venture with L’Occitane was very successful in terms of business, in terms of profit,” he continued. “They are growing strongly and independently, so I don’t think that we will stay with them.”
Asked if there is another market in addition to the U.S. that needs strenuous development, Courtin-Clarins quickly replied, “Japan.” And then he pointed out that Philip Shearer, who joined the company this year in the capacity of chief executive officer, fits the challenge. “Philip Shearer has more than the ideal profile,” said Courtin-Clarins, who moved up to chairman when Shearer joined. “He was president in Japan, he was president in the States,” Courtin-Clarins said of Shearer’s previous tenure at L’Oréal. “He never worked in Europe. We are strong in Europe, but we need those two markets [U.S. and Japan] because they are the most important markets in the world for skin care.”
The Clarins chairman said he continues to reach for sales and profit growth but in realistic terms. His sales target is to show growth of 4 to 6 percent.
“I think that we will be more at the end of the year at 4 than 6 because of the external conditions,” he said adding that “skin care is doing extremely well…double-digit growth.” However, “fragrance is much more difficult because there are still many fragrances coming.” For calendar 2007, Clarins chalked up sales of 1.01 billion euros, or $1.38 billion at average exchange, a 4.2 percent rise.
On the profit side, Courtin-Clarins said the company is concentrating on eliminating unnecessary spending. Business trips will be axed if a meeting can be held via teleconference and promotions will be reined in to avoid a buildup of unsold stock.
“Because of the [financial] crisis we want to spend the same amount of money but maybe not at the beginning behind everything,” he said. “We will concentrate on a few things; we will stop our butterfly marketing strategy, being a little bit everywhere.”
The interview with Courtin-Clarins followed a product preview for spring in which the company unveiled a Bright Plus HP Intensive Brightening Botanical System and a High Definition Body Lift, both of which represents a new generation of technology.
The product presentation, which was conducted by Caroline Pieper-Vogt, senior vice president of group business development at Groupe Clarins USA, also included: HydraQuench Cream SPF 15, Super Restorative Foundation True Lift SPF 15 and HydraQuench Cream-Mask, a lip balm and a collection of color cosmetics.
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