PARIS — Granado is kicking off its international expansion in Paris, where the beauty maker and retailer is opening a first store outside of Brazil’s volatile market, on Thursday.
The 780-square-foot shop in the Saint-Germain-des-Prés neighborhood replicates Granado’s 60 boutiques in Brazil and serves as a litmus test for business abroad.
Step inside the location at 21 Rue Bonaparte and there’s a riot of color, thanks to the product packaging and multihued floor tiles.
Here, there’s something old and something new: Vestiges of the 147-year-old brand’s past abound, with a framed portrait of its founder José Antônio Coxito Granado, a Portuguese immigrant who quickly became the official pharmacist of the country’s Emperor Dom Pedro II, plus a barber’s chair from yesteryear and a street sign from Granado’s first location in Rio de Janeiro.
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“It’s an opportunity. Also I think for any company to be just 100 percent Brazil isn’t very good. It’s a bit dangerous, because Brazil has tremendous ups and downs,” Christopher J.O. Freeman, owner and chief executive officer of Granado, told WWD. He noted the country has just been through its worst recession, with a 10 percent decrease in gross domestic product over the last three years.
He added signs this year point to a bit of growth, “and then next year, we’re expecting more growth.”
Freeman likened Granado’s business strategy to that of Puig — the Spanish company which in September 2016 took a minority stake, of about 35 percent, in the Brazilian concern. “Thirty years ago, 90 percent of their sales were in Spain,” the executive said. “And then the market opened up…and today 90 percent of their sales are outside of Spain.”
Puig’s cash infusion has helped bolster Granado’s growth at home and abroad. The company was able, for instance, to pay off debt incurred in building a 444,440-square-foot factory in Rio.
The Paris store is a bit larger than the average Granado domestic boutique and is fitted with similar wooden and metal-and-glass merchandising units. These stock most of the lines carried from the Granado brand and from Phebo, the Brazilian perfumery and glycerin soap label dating from 1930 that’s also owned by Freeman.
Granado treatment products, which run the gamut from body care to face, bath, hair and nail care, cosmetics and home fragrances, all with vegetable-based, paraben-free formulas, line the front of the light-infused boutique.
Company executives would not discuss sales projections, but industry sources estimate the store will generate first-year retail sales upward of 1.5 million euros.
Granado made its foray into France four years ago with a corner at Le Bon Marché department store. The company’s products are sold in a multibrand concept store in Lisbon, as well.
“We got to know France before other places, and when we started thinking about our own shop [outside Brazil], it seemed the obvious place to start,” Freeman explained.
He said trading at the Bon Marché helped his company up its game. “We realized people here really do take an interest in ingredients in the products,” Freeman said. “It’s amazing to see people here in France — they look at ingredients the whole time, whereas in Brazil, they’re more interested in the smell.”
All of Granado’s stores are wholly owned, and its strongest product categories are foot care, bath care and soap, in bar and liquid formats, while the perfume segment is growing. Among the company’s best-selling products are the Granado Vintage cologne line and verbena and jasmine fragrances.
In Brazil, retail sales comprise 25 percent of the Granado company’s overall business, which this year is expected to reach 450 million reals, or $118.1 million, in net sales, up 12 percent on-year. The company posted similar gains last year in a beauty market that was down about 5 percent, buffeted by the broader economic woes, including exchange rate fluctuations, which negatively impacted imported prestige products.
Prior to the recession, for a decade, Granado had registered compounded annual average growth of 20 percent.
Freeman outlined some notable features of Brazil’s beauty business: In volume terms, it is the largest fragrance market worldwide.
“You have three categories: the local manufactured products, which tend to be relatively cheap, and most of them are knock-offs of things that exist outside of Brazil,” Freeman said. “Then you have the very top of the market, which is all imported, and in the middle you have a segment of premium local products, and there’s very little there. We think there’s big potential.”
He said Brazilians take two to three showers daily. “The volume of bar soap they consume is way above anyone else in the world,” Freeman explained. “Whereas in Europe 80 percent of the soap market would be liquid soap, in Brazil 80 percent of the market is bar soap still, and actually growing.”
Granado, whose products are sold domestically in pharmacies, perfumeries and supermarkets, also has a fast-growing e-commerce business now representing 10 percent of the company’s retail revenues. A new e-commerce site serving Europe, granado.eu, has just gone live.
Granado opened 10 stores in Brazil during 2017 and is expanding internationally “slowly but surely,” according to Freeman.
“Next year, potentially we could open another three or four shops [abroad], but…it depends very much on results of this shop and opportunities,” he said, adding the second shop will probably be in France, with the rest elsewhere in Europe. “I would love to do something in the States.”