Puig Net Climbs, Market Share Grows

Firm on Thursday reported a 19 percent leap in net profits last year to 155 million euros, or $215.8 million, driven by gains in international markets.

PARIS — Puig is gobbling up market share.

This story first appeared in the April 13, 2012 issue of WWD.  Subscribe Today.

The fragrance and fashion group on Thursday reported a 19 percent leap in net profits last year to 155 million euros, or $215.8 million, driven by gains in international markets. Overall, Puig grew its worldwide market share in the selective perfumery sector to 7.6 percent last year from 5.1 percent in 2007, putting it in seventh place in the global fragrance ranking.

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Revenues at the Barcelona-based fashion and fragrance group — parent of the Carolina Herrera, Nina Ricci, Paco Rabanne and Jean Paul Gaultier houses — increased 12 percent in the period to 1.34 billion euros, or $1.87 billion. The growth was fueled mainly by sales in international markets, which accounted for 80 percent of Puig’s business last year, versus 65 percent in 2007.

Dollar figures are converted from euros at average exchange rates for the periods in question.

“The results of last year are the consequences of a certain strategy that we chose to pursue a few years ago, when we said that we wanted to focus our activity in building brands through fashion — and that has to do with the brands that we have in our portfolio — and then translating the image of those brands in the fragrance category, whether ours or from third parties through licensees,” said Marc Puig, Puig chairman and chief executive officer, reached by phone Thursday evening.

“In 2011, we have grown in Europe, we have grown in the international markets, we have grown in the U.S. And the launches of certain products this last year plus the good performance of some of our pillars over the last few years has also contributed to this growth,” said Puig, who explained, save for in Spain, the company posted gains in every market and brand.

Puig’s domestic market now accounts for only 20 percent of its net revenues, versus 36 percent in 2007.

The company highlighted the launches of 212 VIP Men and CH L’Eau by Carolina Herrera as growth contributors in the fragrance category.

Sales in Puig’s fashion division, now headed by president Ralph Toledano, advanced 31 percent last year.

“All brands grew,” said Puig.

About the business, he said, “Although fashion is a small part of our activity, it’s one that is showing consistent growth over the past few years.”

Asked to comment on the ongoing rumor that Puig is interested in acquiring Valentino, the fashion house, whose fragrance license the company already holds, the executive said, “I can say two things in that regard. Number one, that basically we are very happy with the relationship that we started two years ago with Valentino. And as licensee, we have launched last year our first product as a result of this collaboration, and we are more than happy of the relationship, of the results and of the ongoing potential.

“In general, I would say that our aim going forward is to grow the brands we have in our portfolio and the activities we have in our portfolio,” continued Puig. “We think that there is plenty of potential with the brands that we have in our portfolio today. So we’re not looking at adding new brands.”

Sales at Puig accelerated in the first quarter of 2012, advancing 20 percent thanks to a double-digit trend in international markets and single-digit decreases in Spain.

The company expects to surpass 1.4 billion euros, or $1.85 billion at current exchange, in net revenues this year.