NEW YORK — Jean-Paul Agon was by turns amusing and insightful during a wide-ranging conversation on Wednesday evening at the 92Y here with David Rubenstein, the co-executive chairman of the Carlyle Group.
Agon, chairman and chief executive officer of L’Oréal, regaled the crowd of beauty industry insiders and civilians alike with tales of his rise through the ranks of the group and his strategy for making the world’s largest beauty company the top-ranked firm when it comes to gender equality, sustainability and ethics, as well.
He said he decided to pursue a career in business when he was 15, after ruling out psychiatry and film directing. “But in my job today, I do all three,” he said. “It’s partly about understanding the desires of people and creating beautiful images.”
Although he majored in finance in business school, marketing was — and remains — his true passion. “In every case study, my recommendation would be to change the advertising — even though it was a finance class,” he quipped. Turning back to today, he continued, “Beauty is the supreme art of marketing — it is about intuition, perception and creation.”
Agon joined L’Oréal in the sales department at age 21, then moved into marketing. Three years later, a human resources manager asked to meet with him and told him he was being sent to Greece as the general manager. “I realized the business there was extremely tiny and in a terrible state and the people at L’Oréal had proposed the job to everyone and they all said no,” Agon recalled. But the executive thrived, spending five years there, then heading back to France and rapidly rising through the corporate ranks before being tapped to establish L’Oréal’s presence in Asia. “People were wearing cosmetics in China — just not L’Oréal,” Agon said. “We started with a team of 10 and are now the number one company there.”
In 2006, after a five-year stint in the U.S., Agon became ceo and wasted no time in making his mark on the company. When Rubenstein noted that L’Oréal’s share price has risen 200 percent during Agon’s tenure, the ceo quickly corrected him. “More!” he said. “It’s up 400 percent.” Likewise, L’Oréal’s market cap has increased fourfold to $140 billion.
But when asked what makes him most proud, Agon said it wasn’t the business results — it’s the strides L’Oréal has made in gender equality, sustainability and ethics. In terms of sustainability, for example, L’Oréal is one of only two companies worldwide to receive a triple A score from CDP, while on the gender equality front, 50 percent of its board and about one-third of the firm’s executive committee are female.
“When I went back to France, I understood these areas would be important for the future for us,” he said. “If you think about L’Oréal, it’s not that difficult for us to be great in each of these areas. We could have thought about something else. But I said, let’s be number one.
“Today,” he continued, “the fact that we became number one in gender equality, sustainability and ethics is a completely new dimension for us that didn’t exist 10 years ago.”
Despite the strides made in gender equality, there is still a dearth of female ceo’s in the beauty industry overall, including L’Oréal. When Rubenstein asked if he envisions a day when the company will be run by a woman, Agon said, “Yeah, it’s going to change. In the next few years, women will take over. It may not be in the near future, but definitely a woman will run L’Oréal.”
Rubenstein also asked Agon if he thought about retirement. “I will pass the baton when I’m 65,” he said, the age in France in which a ceo is legally required to step down. Rubenstein followed up by asking if Agon harbored ambitions to go into government. “Oh no,” the executive said quickly. “Maybe [L’Oréal’s] board will ask me to continue as chairman. Mine did with me,” he continued, referring to former chairman and ceo Sir Lindsay Owen-Jones, “and it’s a good way to transition I think.”
There have been some bumps and Rubenstein raised one, asking about the Body Shop — which L’Oréal bought in 2006 and sold to Natura a decade later for 1 billion euros — but Agon was sanguine about the situation. “It was an exception to our rule about acquisitions,” he shrugged. “Usually we buy small brands and grow them. Body Shop was already pretty grown when we bought it. We thought we could transform it, but it didn’t work.”
To wrap up, Rubenstein asked if the new wave of digitally native brands have had an adverse impact on L’Oréal. To the contrary, said Agon, who noted that 2018 was the group’s best year yet for growth, prompting Rubenstein to ask him what keeps him up at night.
“Nothing,” Agon said. “I sleep very well — eight hours a night.”