PARIS — Nestlé SA said it will not alter its stake in L’Oréal in April, but industry watchers still believe a change could take place in the mid- to long-term.
“We are not in a hurry to do anything,” Jim Singh, Nestlé’s chief financial officer, said during a financial analyst conference call Thursday to discuss its 2008 results. He explained the Swiss food giant, which holds 30.6 percent of L’Oréal, would uphold its commitment to Liliane Bettencourt, who with her family owns 30.8 percent of the French beauty giant. Bettencourt is the 86-year-old daughter of L’Oréal founder Eugene Schueller.
According to a shareholder agreement, Nestlé is free to sell its stake in L’Oréal as of April 29. But it cannot take a majority share in the firm unless Bettencourt gives her permission or passes away, and, in that case, not until six months following her death.
“The conditions of Nestlé’s agreement with L’Oréal are public,” said Nestlé chief executive officer Paul Bulcke, during the press conference at company headquarters in Vernier, Switzerland. “This is a commitment which Nestlé will honor whatever the circumstances. Consequently, Nestlé does not need to take any action or decision regarding its stake in L’Oréal in April.
“The future of Nestlé’s participation in L’Oréal is an important topic for the group, which the Nestlé board of directors is addressing with great attention in the framework of our group’s global nutrition, health and wellness strategy,” he continued. “Nestlé’s participation in L’Oréal has been beneficial to both companies for many, many years, and Nestlé will continue to take a long-term strategic view in shareholders’ best interest.”
Speculation, meanwhile, remains rife over what Nestlé will ultimately do with its stake in L’Oréal. Adding fuel to the fire is the family feud between Bettencourt and her daughter, Françoise Bettencourt Meyers, who is due to inherit her mother’s stake in L’Oréal once she dies. Both sit on the firm’s board.
About a possible L’Oréal takeover by Nestlé, Chicuong Dang, an equity analyst at KBL Richelieu, said, “You can’t expect anything in the very, very short term, given the extremely difficult environment. In the short term, they just have to wait things out. Maybe they can get a better price.”
“I think it will be interesting to see what happens with Mrs. Bettencourt’s shares due to the family situation,” said another analyst, who spoke on condition of anonymity. “I think Nestlé might be able to increase its stake.”
L’Oréal and Nestlé already operate two joint ventures: Galderma, the dermatology brand, and Innéov, for nutritional supplements.
On Thursday, L’Oréal stock closed flat at 52.36 euros, or $66.36, while Nestlé’s ended up 5.83 percent to 39.18 Swiss francs, or $33.36.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast