SANOFI: TIME NOT RIGHT TO SELL OFF BEAUTY UNIT
PARIS — French business papers reported last week that the pharmaceuticals and beauty products giant Sanofi plans to sell off its beauty division, which includes Yves Saint Laurent, but the company quickly moved to “clarify” the reports.
In a statement issued Friday, Jean-Paul Leon, Sanofi’s executive vice president for administration and finance, said that an eventual beauty sale “could only be considered at a time when Sanofi would have an opportunity to make a major acquisition in its pharmaceutical business that would make such a transaction necessary. At the present time this is not the case.”
On Thursday, Leon had told journalists at a conference sponsored by the bank Credit Commercial de France that Sanofi could eventually sell its beauty business, which is comprised of Oscar de la Renta, Van Cleef & Arpels, Roger & Gallet, Krizia and Fendi, along with YSL.
Sanofi also holds a 56.8 percent stake in Nina Ricci and 61.9 percent of Yves Rocher. As reported in WWD July 30, Nina Ricci is already officially on the block. Although industry observers have long said they expected Sanofi to get out of beauty, it was the first time the company has publicly suggested a selling off of the business.
Meanwhile, first half earnings and sales were ahead at Sanofi as losses in the beauty business were cut by more than half.
For the first six months, the beauty business had only a slight sales rise because of the absence of new product launches, the company said. It added, however, that better cost management cut the operating loss to $5.1 million (31 million francs) from 74 million francs in the year-ago period.
Overall, profits before a special gain from the sale of several pharmaceuticals businesses were up 10 percent.
After the gain, the company earned $172.4 million (1.066 billion francs) against 616 million francs in the year-ago period.
Overall sales were up 7 percent to $1.978 billion (12.108 billion francs) from 11.348 billion francs a year ago.
Operating profits were off 3 percent to $252.8 million (1.547 billion francs) from 1.603 billion francs.