By and  on April 22, 2009

In the second top-level departure within two months at Procter & Gamble Co., Hartwig Langer announced his retirement Tuesday as president of P&G’s Global Prestige Products Division, after building P&G into a global force in the fragrance market.

 Langer, 53, will be succeeded as president by the 44-year-old Patrice Louvet, who, for the last nine months, has been vice president of strategy and growth for the division, which is based in Geneva.

Langer will step down as division president on July 1, but his retirement date is set for Jan. 1. In the interim, he will be on special assignment, P&G said, in order to provide a smooth transition, reporting to Ed Shirley, vice chairman of global beauty and grooming.

In his new position, Louvet will also report to Shirley, while remaining based in Geneva.

Langer has been with P&G for more than 28 years, virtually his entire career, and he has devoted 18 years of that time to the development of the fine fragrance category.

Langer took charge of the division in July 2004 and immediately set to work shaping a jumble of more than 40 disparate brand names into a focused, more productive stable of designer businesses under the mantra of “fewer, bigger, better.” The number of brands was whittled down to 23.

A key development in this period was the acquisition of the Dolce & Gabbana license from Euroitalia, plus the reacquisition of the Gucci license. Other players included Hugo Boss, Burberry, Lacoste and Jean Patou.

At the beginning of Langer’s tenure, industry executives were questioning whether P&G had a strong enough interest to stay in the fine fragrance business. When Langer became president, industry estimates of P&G’s fragrance business ranged from less than $1 billion to more than $1.5 billion wholesale. The division then went on a growth tear, outstripping its rivals and becoming a major global player, with estimated sales of $3 billion at wholesale.

“Hartwig has been a game-changing leader and strategist,” Shirley said in a statement. “He has succeeded by turning the industry’s conventional business model on its head by challenging the industry paradigm that being in touch with the consumer would not yield fresh insights in an industry dominated by creative individuals. He has left an enduring legacy at P&G and in the beauty industry.”

Shirley also praised Louvet as “well positioned to sustain and strengthen the growth of P&G Prestige. With more than 20 years of experience at the company and 15 years in beauty, he has successfully led several of P&G’s businesses in multiple regions. He is a cosmopolitan leader with experience in Europe, Asia and North America. And he is a beauty expert whose experience in skin, hair and color cosmetics will help us further grow our prestige beauty business on the strong foundations in place today.”

Karen Grant, senior global industry analyst and vice president of beauty at The NPD Group, a consumer sales tracking firm, said “one of the things that Langer definitely did was to reposition the brands” and give the business greater focus. She pointed to his positioning of Dolce & Gabbana’s Light Blue for Men as a male counterpart to the brand’s women’s fragrance. The men’s version was put in position to compete with Giorgio Armani’s Acqua di Gio, the industry leader. In addition, there was the launch of Dolce & Gabbana’s The One for women and then men. As a result, Grant said, P&G scored a number-one ranking in launches for both male and female fragrances last year. “The Dolce & Gabbana brand was able to resonate across both genders,” Grant said. “That was a tremendous win for them.”

The streamlining and focusing allowed P&G to exert strength with different brands in different markets. While Hugo Boss ranked second in Europe, it had less of an impact in the U.S., but in North America and Italy, Light Blue was in the top five. This gave P&G a top-five positioning in the U.S., Italy, Mexico and France, Grant noted.

But while Langer has clearly scored success, the worldwide fragrance business has since turned into the most bearish element of one of the worst global beauty markets in decades. In early March, Susan Arnold had retired as P&G’s president of global business units. Linda Bolton Weiser, analyst at Caris & Co., noted that even P&G is not immune to such an inhospitable business climate. “P&G has issues within the beauty division. [The departure] is expected because prestige fragrance is having trouble, due to the economy.”

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