Net income at the family-owned Spanish fragrance and fashion company totaled 155 million euros, or $171.6 million at average exchange rates.
Marc Puig, chief executive officer of Puig, told WWD its three-year strategic plan, announced in 2015, is bearing fruit. The company is on track to reach sales of 2 billion euros, or $2.17 billion at current exchange rates, this year.
“In the first year of this three-year period, we sacrificed profitability at the expense of increased effort to support our brands,” he explained. “What we said is that by the end of the three-year period, we would be reaching a level of profitability that was the one we had prior to this plan.”
Puig reported that during the first quarter of this year, its sales grew 13 percent. The company reiterated its plan to increase revenues by 33 percent between 2015 and 2017, in order to reach the 2 billion euro mark and continuing to improve its profitability ratios.
In 2016, Puig’s pre-tax profit increased 19 percent to 215 million euros, or $238 million, while company sales gained 9 percent to 1.79 billion euros, or $1.98 billion. On a like-for-like and constant-currency basis, revenues were up 5 percent.
The company generated 85 percent of its sales outside of Spain, and 44 percent of its revenues in emerging markets, which are beyond the European Union and North America.
Puig counted 4,430 employees last year, 40 percent of whom worked in Spain. The company produced all of its fragrances there and in France, and sells its products in more than 150 countries. Subsidiaries are operated in 22 of them.
Puig integrated the Jean Paul Gaultier fragrance business starting Jan. 1, 2016. At the time of its transfer from Shiseido-owned Beauté Prestige International, it was estimated that the business should contribute approximately 10 percent to Puig’s top line during the first year as part of its business.
Puig continued investing in the niche fragrance category. Last year, it purchased a minority stake in Los Angeles-based fragrance brand EB Florals, which was begun by celebrity florist Eric Buterbaugh. Puig also took a minority stake in Brazilian high-end beauty firm Granado. The brand was founded in 1870 and operates 51 stores countrywide.
Among its fragrance highlights last year, Puig named the introductions of Prada’s L’Homme and La Femme; Luna by Nina Ricci, and Carolina Herrera’s Good Girl. Spotlighted, too, were Colors from Benetton and Shakira’s Dance.
After integrating the Penhaligon’s and L’Artisan Parfumeur businesses in 2015, Puig expanded their activities last year. It opened six new Penhaligon’s stores in the U.S., and consolidated the brand’s positions elsewhere in the world, with 13 stores in the U.K., six in Asia and two in Paris. Penhaligon’s sales growth was bolstered by the launch of the Portraits fragrance collection, Puig said.
L’Artisan Parfumeur’s image was renovated, and the brand — as part of its relook — opened a new store in Paris’ Left Bank Saint-Germain neighborhood.
On the fashion front, Carolina Herrera New York feted its 35th birthday in 2016 and hosted numerous celebratory events, including one at the U.S. embassy in Madrid. A book, “Carolina Herrera, 35 Years of Fashion,” edited by Rizzoli, was released.
After making the rounds to 12 countries over the span of five years, and being viewed by more than 2 million people, the Jean Paul Gaultier exhibition “From the Sidewalk to the Catwalk” ended in June 2016 in Seoul.
Last year, Puig’s social action project driven by its foundation, called “Invisible Beauty,” worked with Ashoka to select five teams of social entrepreneurs between the ages of 18 and 20, and offer them mentoring, training and a grant for their projects. Two social entrepreneurs were selected for financial and strategic support from Puig, as well.
In 2016, Puig reduced its emission of greenhouse gases from its factories by 18 percent and maintains its objective of being carbon neutral in 2020, while consolidating its goal of reaching zero waste-to-landfill.
“The company also managed to get all of the electricity used by its production plants and offices from renewable sources, and reduce the environmental footprint of employees,” it said in a statement.
During the first three months of 2017, Puig created wholly-owned subsidiaries in Colombia and in Australia. It also inked a joint-venture agreement with Luxasia, one of the largest distributors in the Asian market, which is based in Singapore. The deal was made to bolster Puig’s operations in Southeast Asia, as reported.