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Groupe Clarins Ups the Ante

With new prestige skin care and blockchain traceability, the French beauty company faces staunchly forward.

Prestige skin care? Check.

Advances in China? Check.

Blockchain traceability? Check.

Technical beauty? Check.

Groupe Clarins is ticking off the boxes of what needs to be done by a beauty company in today’s ever more competitive landscape — especially when you’re 69 years old and competing head-on with frisky upstarts.

It’s part of the group’s overarching, four-pronged Clarins Unlimited strategy that has been credited with driving strong growth over the past few years, despite the coronavirus pandemic and other socio-economic headwinds.

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“We’re still in our strategy of unleashing the power of Clarins globally,” said Jonathan Zrihen, Groupe Clarins’ chief executive officer.

According to industry source estimates, the group’s sales grew 15 percent in 2022 versus 2021 and 20 percent against 2019. So, it has already offset the impact of coronavirus-related shutdowns and a massive slowdown in Russia, an important market.

Therefore, the group is on track to cross the 2 billion-euro net revenue threshold in 2024, the sources estimated.

That is despite internal changes at Groupe Clarins. The company shifted gears in March 2020, when it sold its fragrance division to L’Oréal. While Groupe Clarins was creating perfumes as well as other beauty product categories, “our team was losing the full focus on Clarins,” said Zrihen. “Sometimes we were making some investment arbitrations.

“We thought that once we sell our fragrance division and have more means to further develop and accelerate Clarins, we see geographical opportunities,” he continued.

Still, no regrets for having sold Clarins’ fragrance division, now that the category is red hot again?

“No,” said Zrihen. “We have basically absorbed nearly all the size of the fragrance business into Clarins, so we are in line with our strategy.”

Clarins executives identified levers for growth after listening to consumers around the world and studying the beauty market’s evolution.

Geographically, Clarins has lots of muscle in Europe, where it is the leading prestige skin care brand, “but we see huge potential in Asia,” said Zrihen, who opened that market for the group 20 years ago, starting in China.

“Today, China is our number-one market by far, and it’s been accelerating tremendously,” he continued. “We still want to invest in China, and as we are balancing our business, we are also investing in the U.S.

“Then we have what we call our ‘categories conquest,’” said Zrihen. “To reinforce our leadership in skin care, we’ve identified that we need to position the brand in the premium market also.”

Clarins Double Serum Light Texture.

Clarins executives noted luxury product ranges from key competitors and freestanding prestige brands that were lassoing a consumer base Clarins was not. So that left a white space, especially in a market such as China, where the premium segment is said to generate close to 40 percent of overall skin care sales.

“We thought it would be interesting — just as an exercise — to see [what would happen] if we were to position [ourselves with] a more precious and elaborated range,” said Zrihen. “It’s in this context that we decided that we will foray into the premium market.”

Clarins launched a prestige range, called Precious, in China in retail and spas in September 2022. The demand since has been so strong it’s been hard to keep up with supply, according to Katlin Berenyi, global general manager of Clarins.

Precious will be launched progressively in tight distribution in Europe, beginning in March 2023. To mark the introduction, 300 non-fungible tokens are to be released.

“We were looking for a rare ingredient, a rare technology and rare results,” said Berenyi. “Everything has to be exceptional.”

Clarins chose the moonlight flower — which blooms only once a year, is harvested by hand and frozen by cryotechnology — for its strong youth-promoting properties. Precious is billed to help erase five years of age off skin.

The range, which currently consists of a face cream, lotion, eye cream and serum, is expected to grow to 25 references in four years. Its price points run about $300 for a 50-ml. jar of La Crème.

Precious product packaging is made of a metal fused with plastic, a wholly recyclable material that has only been used in the automotive industry until now.

Industry sources estimate that in a few years, Precious could ring up about 10 percent of Groupe Clarins’ overall sales.

Zrihen declined to comment on the estimates, but said that Clarins has gained share in skin care in numerous markets over the past two years. That’s thanks in part to some strong product launches, especially in the eye category — Total Eye Lift and Double Serum Eye, for instance.

“Clarins was a leader in many categories, not in the eye category,” said Zrihen, adding it’s taken back some leadership in the segment in markets such as Europe, Asia and the U.S.  

This year, Clarins is introducing Double Serum with a light texture, which should lure a younger client as well as those in Asia.

The company has also gained market share in the antiaging categories due, in part, to the new Super Restorative and Nutri-Lumière lines.

Another product category growth driver for Clarins is expected to be makeup.

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“When we analyze today the strength of Clarins, of course we are pretty strong in antiaging products, where there is the Double Serum or Extra-Firming range of skin care products,” said Zrihen. “We’re pretty good in the body segment and sun.”

Its makeup business is relatively small versus the strength of the brand globally, however. A global relaunch of its color cosmetics was in the works, but the company opted during the pandemic to delay it until between 2024 and 2026.

“In ’22 and ’23 we tested the elasticity of our makeup by starting to invest in selected markets by introducing several products, like the Lip [Comfort] Oil, which has been super successful,” said Zrihen.

Limited-edition Clarins Lip Comfort Oil.

“We couldn’t produce enough,” said Berenyi.

Cosmetics production will expand for Clarins, however, thanks to a second facility in France, based in Troyes. The 13.5-hectare, eco-friendly site should be operational in fall 2024, backed by an investment of approximately 135 million euros.

The test markets for makeup have been France, the U.K., Switzerland and Spain.

“We grew between 20 and 45 percent [our color cosmetics sales] in Spain,” said Zrihen. “So, we are pretty convinced that once we allocate the right resources, put the right products, the right focus, we can easily double our business in makeup.”

A third growth lever for Groupe Clarins is what the company calls “consumer conquests.”

“For us, the idea was to say we have the opportunity — as we want to unleash the full potential of Clarins — to create a direct relationship with our consumers through our digital platforms and our stores,” said Zrihen.

To help reach consumers, there’s been an emphasis on content creation with a large dose of education thrown into the mix.

“[Consumers] are getting more informed, but in a very new type of way,” said Zrihen, explaining people are increasingly interested in topics such as molecules and ingredients.

“The multiplication of the touch points is just incredible,” said Berenyi. “So, we are doubling and tripling the different assets that we are developing, because you need snackable ones on social media, then you need [other assets] around the product.”

On the retail front, Clarins has been opening new boutiques and now has 130 worldwide, with the majority in Asia, but also in Europe and the Middle East.

“We don’t have that many yet in North America. We will expand [there] progressively,” said Zrihen.

The idea is for Clarins to use its own stores to capitalize on its expertise, especially with spas. There are 30 in the pipeline.

Wellness is what consumers are after today, and Clarins is hoping to leverage its history there to fuel growth. For the first 10 years of its existence, it didn’t sell any product, instead acting as a service company. Today, Clarins takes a hands-on approach with its spas and 450 gestures used in skin rituals.

“From the very beginning with Jacques Courtin, the reason why he created his brand and his institute was to answer to the wellbeing of women,” said Zrihen. He added Clarins products are meant “to be the beauty companion [of consumers] throughout life.”

Digital business is an important part of the consumer conquests, as well. Zrihen noted that brick-and-mortar presences will always be key, and Clarins continues valuing its relationship with retailers. But as the brand globetrots, its online activity will ramp up.

“Our goal is also to transform Clarins to become a [direct-to-consumer] brand,” said Zrihen. “Through this transformation — which is the acceleration of our digital platform, the digital transactions and digital services — we have created unique services on our platform with what we call the virtual boutiques, where basically everywhere around the world now you can have access to beauty advisors online.”

The digital hubs are in all of Clarins’ IRL countries, which has led to an acceleration of the brand’s digital penetration. Industry sources estimate Groupe Clarins currently generates 20 percent of its sales on its own websites — versus 5 percent six years ago — and 5 percent in its own stores.

Zrihen believes that digital transactions will make up at least 40 percent or 50 percent of the beauty industry’s sales overall.

“We see it already in the U.S., U.K. and China,” he said.

HyperFocal: 0
Clarins Nutri-Lumière Jour.

Clarins has effectively broadened its consumer base, especially toward younger consumers, while expanding online. Through social media, the group has been recruiting younger clients by promoting and expanding certain product ranges, such as My Clarins and makeup.

“But at the same time, we are investing a lot with retailers such as Sephora that have been pretty good in talking to young customers,” said Zrihen.

In the first quarter of 2023, Clarins is launching a new hydrating range with a transversal offer, with a slightly lower price point, designed to attract a younger demographic.

The fourth prong of Clarins’ strategy is hinged on its commitment to responsible beauty.

Jacques Courtin, said Zrihen, “had the intuition that beauty is intimately linked to nature, [that] we have to protect nature.”

Jacques Courtin’s son, Christian Courtin, recognized the importance of protecting natural environments, so he began buying land and decades ago started a sustainable development program.

Now with Viriginie Courtin, Christian Courtin’s daughter who is managing director of Groupe Clarins, the company drew up concrete commitments for 2025, including reaching plastic neutrality.

Clarins recently migrated some of its products to the blockchain with three interfaces: one for suppliers, another like a safe holding data and the third a consumer platform, called TRUST, which is an acronym for “traceability,” “responsibility,” “uniqueness,” “security” and “transparency.”

For two years the company has been operating carbon neutral, and for three it’s been only using clean formula ingredients.

“We have a black list which is very rigorous,” said Berenyi. “We didn’t wait for the trend to arrive.”

Zrihen said Clarins isn’t keen on the descriptor “clean.”

“We never felt that we were dirty,” he said, adding the group has always been among those with the most advanced cosmetovigilance system and is compliant with 150 countries’ regulations. “We prefer to use the word ‘beauty-conscious.’”

Part of Clarins’ ability to maintain sustainable growth is its strong alignment between management and the Courtin family — which owns the group and now has two third-generation members helping to run it, Prisca Courtin, chairman of the supervisory board alongside her cousin Virginie Courtin.

“[It] has allowed us to maintain a sustainable investment with always a very long-term view,” said Zrihen.

He also underlined Clarins’ strategy of permanently reformulating products, sampling and its educational focus as contributing to bolster the growth.

Clarins believes in acquisitions as well as incubating brands. The company works with the Courtin family’s holding company, Famille C.

“Together, if we identify that there is another company that could be complementary to Clarins, we’ll learn from them or we can accelerate their development, we will do some investment through this holding,” said Zrihen. The purchase of Ilia, in February 2022, and the minority investment in Pai Skincare, in April 2021, are examples.

“We could have additional potential investments,” said Zrihen, who sits on the Courtin family holding’s investment board. “We’re looking regularly at some potential acquisitions.”

Last May, Clarins also began relaunching My Blend, a premium made-to-measure skin care brand. It’s in one Clarins store in Paris’ Marais neighborhood and rolling out to some prestige spas around the world, such as the Ritz-Carlton in Toronto, and the Thermes Marins Monte-Carlo Monaco.

“It responds to a trend which we see that is [for] more technical beauty,” said Zrihen. “People are interested in molecules, science, LED masks, tools – and that’s why we developed this brand.”

Clarins is in talks with high-end retailers to expand My Blend’s distribution.

There’s a common thread running through Groupe Clarins’ vision of beauty. Zrihen said it must be authentic and genuine, going beyond a person’s appearance.

“We never consider beauty as just how people look, but how they feel,” he said. “It’s part of a philosophical approach, which is the wellbeing of consumers.”

Clarins for the Win

  1. The strategy to divest its fragrance business and focus on the core Clarins brand has worked. Group sales grew an estimated 15 percent in 2022 on-year.
  2. Early testing of a revamped makeup range is positive, with sales up between 20 and 45 percent in select markets.
  3. Clarins has been an early adopter to blockchain technology, using it to drive transparency and traceability with consumers.