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Guerlain Seeks a New Road

PARIS — Guerlain is at a crossroads.<br><br>Executives at the fabled 174-year-old LVMH Moët Hennessy Louis Vuitton-owned house unveiled a new business plan to a group of some 40 journalists this week, causing a stir amongst the...

PARIS — Guerlain is at a crossroads.

Executives at the fabled 174-year-old LVMH Moët Hennessy Louis Vuitton-owned house unveiled a new business plan to a group of some 40 journalists this week, causing a stir amongst the hyper-nationalistic French.

The meeting held in the flagship Guerlain shop on the Champs-Elyseés here came nine months after numerous changeovers took place in the firm’s upper echelons. These included — in a mere four-day stretch in January — the departure of Guerlain’s in-house perfumer, Jean-Paul Guerlain, who’s also the great-grandson of the house’s founder, and Guerlain’s then president and managing director, Thibault Ponroy.

Guerlain, long considered the jewel of French perfumery, has not had a major fragrance hit since 1989’s Samsara. Its last big fragrance to be launched, Mahora, in 2000, for instance, never took off.

In terms of numbers, Guerlain generated sales of $383.9 million last year, down 4 percent. Guerlain is LVMH’s second-largest beauty holding, behind Parfums Christian Dior, which rings up an estimated $1 billion.

Renato Semerari, Guerlain’s current president and managing director, opened proceedings by saying he realizes some present might have “the idea that Guerlain is changing too much.”

“In reality, there were quite a few changes, it’s true,” he said. “But turnover is normal in today’s companies.”

Further, “Jean-Paul is always here,” he reminded, referring to Guerlain, who’s acting as a consultant for the firm’s fragrance projects.

When it comes to Guerlain, Semerari called for an evolution, not a revolution. “You can’t revolutionize the spirit of a brand 100-years rich,” continued Semerari, who hopes his new strategy will cause the firm to register 10 to 12 percent sales growth year-on-year, starting in 2003.

To do this, his plans include:

Capitalizing “on the originality of the [Guerlain] brand.” To this end, Semerari and his team have been studying Guerlain’s points of difference over the years, including its “refined luxury.” He called Guerlain an “intimate” brand strongly linked to smell and touch.

Opening the brand’s vision and reach. For the first time, Guerlain’s marketing team is collaborating with out of house fragrance suppliers to glean inspiration for upcoming scents. In the past, Guerlain has prided itself on doing its own perfumery in-house. Guerlain’s distribution will be widened, particularly in markets outside of France, such as Southern Europe.

Bringing more modernity to the brand. Semerari said that to inspire a more classic-contemporary image, Guerlain executives consulted with artists to share their visions of beauty and modernity.

A couple of journalists criticized the direction Guerlain has taken recently and the course of action laid out at the press conference. One chided the firm for putting advertisements in bus shelters; he thought it damages the brand’s prestige image.

“To be successful, a brand must be visible,” replied Semerari. Guerlain was also chided for devising coffrets for the holiday season, a strategy that other LVMH-owned beauty brands have taken.

Semerari denied that Guerlain was being homogenized. “We have had long discussions with Mr. Arnault,” Semerari said. “He wants us to keep the specificity of [each brand within the group]. The group has no desire for uniformity.”

Guerlain plans to prove this with upcoming launches. In October, the brand will unveil a new skin care product to the press, and in the second half of next year, a major fragrance.