BERLIN — Beiersdorf would like to double revenues of its La Prairie Group in the next five years.
The Switzerland-based prestige arm of the Beiersdorf Group, which formerly operated under the Juvena/La Prairie Group moniker, encompasses the La Prairie, Juvena of Switzerland, Marlies Möller and SBT Skin Biology Therapy brands. Growth plans call for each brand to simultaneously focus on different global markets.
In 2004, the group achieved currency adjusted sales of 186 million euros, or about $243 million at average exchange. This represented an 11 percent increase on top of a 10 percent rise in sales in 2003. While results for 2005 will be released later this month, Dirk Trappmann, president and chief executive officer of the La Prairie Group since last April, said the group had “another excellent year [in 2005], with a light double-digit gain.”
The decision to call the operation La Prairie Group reflects the strength of the La Prairie luxury brand, which is sold in more than 90 countries, and generates about 75 percent of the group’s turnover. But the name change was also meant to signal “that though we are a firm with four brands, we have one vision,” Trappmann said.
That vision anticipates improved synergies and resulting cost savings between the four brands. For example, in Europe’s chain-dominated market, “We don’t need four people going to Marionnaud, but just one competent person. You can improve service to the [retail] industry when you put things together,” he said.
At the same time, however, the group’s strategy calls for each brand to build awareness in a highly individual manner, especially in undeveloped markets. At La Prairie, this year’s primary focus will be on expansion in Asia, with a vice president for the Asia Pacific region now stationed in Shanghai to control business on-site. “China was the only country [in Asia] where we weren’t present, but as of December 2004, we opened in Beijing, and now have doors in Shanghai and Guangzhou as well,” noted Trappmann.
Building La Prairie’s duty-free business worldwide is the brand’s second strategic aim. “Our consumer travels and we see big opportunities,” he said. The first La Prairie skin care center was opened in the Zurich airport last year, and it won’t be the last, according to Trappmann. La Prairie “also took a great step with our subbrand Silver Rain and we opened the first Silver Rain spa in the Grand Cayman Ritz Carlton,” he noted. “It’s a completely new dimension in spas.” The concept features 17 treatment rooms, with special lounges to reflect different moods.
For Juvena, the launch of Juvedical, a line that features serums and creams, two years ago generated double-digit growth for the skin care brand, which at the same time trimmed local distribution considerably. “We closed 500 doors, but grew sales consistently in the accounts we kept,” Trappmann said.
Now, Juvena will focus on Europe and the U.S. “We have to work on the U.S.,” Trappmann acknowledged. “I was in the States earlier this year, and I have the feeling there are many opportunities where an innovation like Juvedical would be very well received.” The skin care range, which integrates first aid medical technology, was introduced in the U.S. in October and is carried at retailers like Bath & Body Works and C.O. Bigelow, “but we’re much too small there,” said Trappmann. “We now have to determine what our future [in the U.S.] will look like.”
The La Prairie Group’s Marlies Möller prestige consumer hair care range is the market leader in Germany, Switzerland and, as of last year, Holland, Trappmann noted. Möller is poised to enter Turkey and Russia, and Trappmann said Russia could become one of the brand’s most important markets. He added activities in the U.S. would also be stepped up in 2006.
The youngest member of the La Prairie Group is SBT Skin Biology Therapy, Germany’s first doctor brand, which was launched last year. It was developed with Volker Steinkraus, director of the Dermatologikum Hamburg and one of Germany’s leading dermatologists. First-year distribution was limited to a total of 120 doors in Germany, Austria and Switzerland. The range “has performed very well. The overall feedback has been extremely positive,” Trappmann said. “Our research shows SBT is indeed bringing new customers into the perfumeries.”
SBT entered its second phase with the introduction of six so-called Dermatological Problem Solutions in the fourth quarter last year. These include “cell culture solutions” to deal with irritation, pigmentation, couperose skin and blemishes. The line ranges in price from 25 euros to 60 euros, or $29.80 to $71.55 at current exchange.
Distribution of SBT will be expanded this year, according to Trappmann, “and we’ll decide what countries we’re entering and how [we’re entering them] over the course of the year. But we expect to double sales.” He noted SBT is still very small, “but the dermatological category has great potential, especially in the U.S.”