PARIS — Puig, the fragrance and fashion company that has finely honed its brands’ storytelling over the past few years, is shifting the focus to enriching consumers’ overall experience with a new collaborative platform, called Puig Futures.
Its launch was revealed on Thursday, the same day as Puig’s full-year 2017 numbers were released, and is part of the Spanish family-owned group’s push to break past the three-billion-euro mark by 2025.
Marc Puig, the company’s chief executive officer, sat down with WWD to discuss the new strategy and talk numbers. He also fielded questions about his group’s fashion business, which has been in flux.
In the middle of March, it was revealed that Guillaume Henry was leaving his post as creative director of Nina Ricci after three years in the job.
“At the end of [his] contract both parties felt it was better to part ways,” said Puig, without delving into further details. He did say, however, that the search for Henry’s design successor “is ongoing.”
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Puig described the Nina Ricci brand, which recently welcomed Charlotte Tasset in the newly created post of general manager fashion and fragrances, as having “tremendous potential.”
“You smile when you say Nina Ricci, because it’s a brand that feels very familiar,” he said. “It’s true that we have not been able to capture all the potential, but the potential is there, and we are going to get behind it. That’s why, among other things, we brought onboard a new person to lead the house.”
Over at Carolina Herrera, the namesake designer took her final runway bow in February. At that time, she handed the design reins to Wes Gordon and became “global brand ambassador.” Her exit, which followed a period of turbulence in the creative direction of the brand, was not a surprise move within Puig.
“We have been discussing with Mrs. Herrera for a few years now how to handle this process,” Puig said. “And I think it’s not usual that a transition like this happens [as a] smooth process. But even with some hiccups that we have had, I’m very happy how things went, and I think both Mrs. Herrera and Puig, the company, are happy to see how things have developed.”
Herrera, he continued, will be an ambassador for the house carrying her name. That involves representing and supporting all strategic initiatives and events for the brand, according to the company.
Her daughter, Carolina Herrera Baez, remains creative director of Carolina Herrera Fragrances, a job she’s held for the past 17 years. And Patricia Herrera Lansing, another daughter, stays on as a consultant to the fashion house.
The Puig group remains fully committed to the Herrera fashion business, Marc Puig said. “The Carolina Herrera New York fashion house is a profitable house over the last 10 years,” he added.
Meanwhile, Mario Testino’s last campaign for the brand was shot two seasons ago, and Carolina Herrera is not continuing on with him at this point. (As reported, allegations of harassment and abuse were made against the photographer by male models earlier this year.)
The designer Jean Paul Gaultier, alongside focusing on creating his couture collections, is gearing up to stage the “Fashion Freak Show” cabaret production, based on his life in fashion, at Les Folies Bergère next October.
Regarding Puig’s fragrance business, which still generates the lion’s share of the group’s overall sales, travel retail and the Asian market are expected to be the main drivers of the prestige perfume category during the next decade. They are anticipated to grow two times faster than the category overall.
“We are one of the companies that has the highest exposure in emerging markets versus some of our competitors, because we already felt many years ago that it was an area for growth opportunities, and we over-invested there,” Puig said.
Emerging markets, outside of North America and the European Union, generated 44 percent of the company’s total revenues, which came in at 1.94 billion euros, up 8.1 percent in 2017 versus 2016. That was just shy of Puig’s goal of hitting the two-billion-euro mark last year, due to unfavorable currency exchanges.
Net profits, meanwhile, rose 47 percent to 228 million euros in 2017, the end of its most recent three-year plan. Puig had predicted they would grow steeply last year after having in 2015 opted to make a major investment behind its brands, including the integration of the Gaultier perfume business, to the detriment of profits in the short term. Puig’s view was that it would return to a level of profitability the company had enjoyed prior to 2015, and that it would have a more sustainable business in time.
The group’s portfolio is comprised of owned fashion and fragrance brands plus licensed perfume labels.
Marc Puig said that while looking at the tectonic shifts shaping the world today — the digital revolution, changes in consumer behavior and the way brands are built and communicate — it became clear that the impacts have been different per beauty product segment.
Color cosmetics and, to a lesser extent, skin care are selfie-ready. “These are visual categories,” he said. “The fact that you can see the effects of that product in a visual way has tremendous impact on the industry — more so than it has on the fragrance category, because it’s not visual.
“That has a significant impact in the way the industry evolves,” Puig continued, adding that’s not to say the fragrance business won’t have plenty of changes moving forward. But they will be different.
“We want to be at the leading edge of those changes, and we are willing to be innovative in that regard,” Puig said. “We have up to now probably [been considered] as a company that has had very good storytelling, creativity, product development and product excellence. What we want to do is translate this capacity we have of seeing changes and applying that not only [to those elements] but in the whole value chain.”
Ideas of how to develop the business can come from inside as well as outside Puig, he believes. “We want to be proactive in that regard, and be a partner for those that have ideas that may impact our industry,” Puig said.
Puig Futures is a three-pronged platform involving developing new “disruptive” business models, partnerships with companies and taking minority stakes in third-party enterprises related to the fragrance category. It will back innovative projects with capital, experience and commercial opportunities.
Puig said there is plenty of frustration in the purchase and usage processes related to perfumes. “There are going to be plenty of ideas that people come up with — either inside or outside our company — to respond to those frustrations,” he said.
A case in point is the new Airparfum dispenser system, created under Puig Futures, using a touch screen. It has a patented device that transforms previously purified air into fragranced air, allowing consumers to sample perfumes in-store without the risk of olfactory fatigue. Puig believes that the technology, whose seed was sewn by inventors who approached the company, will revolutionize point-of-sale testing.
“We have been trying to understand the consumer behavior and shopper behavior in a way that we have not done in the past,” Puig said. “Our conclusion is that the fragrance category is not in decline, that the young consumer does value the fragrance category and that the category is relevant.”
Over the past few years, Puig was intent on gaining market share in order to obtain a certain critical mass it felt was needed to be relevant in the channel.
“I don’t believe at this point size is the most important criteria or dimension,” he said. “It is your ability to bring excitement, innovation and attract traffic.”