L'Oreal Paris

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Transcript of L'Oreal Paris

TheL'Oral Groupis a Frenchcosmeticsandbeautycompany, headquartered inClichy, Hauts-de-Seine.It is the world's largest cosmetics company, and has a registered office inParis. It has developed activities in the field of cosmetics, concentrating onhair colour,skincare,sun protection,make-up,perfumesandhaircare, the company is active in thedermatology,toxicology,tissue engineering, andbiopharmaceuticalresearch fields and is the topnanotechnologypatent-holder in the United States.

In 1909, Eugne Schueller, a youngFrenchchemistofGermandescent, developed a hair dye formula calledAurale. Schueller formulated and manufactured his own products, which he then sold toParisianhairdressers. On 31 July 1919, Schueller registered his company, the Socit Franaise de Teintures Inoffensives pour Cheveux (Safe Hair Dye Company of France). The guiding principles of the company, which eventually became LOral, were research and innovation in the field of beauty. In 1920, the company employed three chemists. By 1950, the teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today.Schueller provided financial support and held meetings forLa Cagouleat L'Oral headquarters. La Cagoule was a violent Frenchfascist-leaning and anti-communistgroup whose leader formed a political partyMouvement Social Rvolutionnaire(MSR, Social Revolutionary Movement) which in Occupied France supported the Vichy collaboration with the Nazis. L'Oral hired several members of the group as executives afterWorld War II, such asJacques Corrze, who served asCEOof theUnited Statesoperation. This involvement was extensively researched byMichael Bar-Zoharin his book,Bitter Scent.LOral got its start in the hair-colour business, but the company soon branched out into other cleansing and beauty products. LOral currently markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair colour, permanents, hair styling, body and skin care, cleansers, makeup and fragrances. The company's products are found in a wide variety of distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.LOral has six worldwideresearch and developmentcentres: two in France:AulnayandChevilly; one in theU.S.:Clark,New Jersey; one inJapan:Kawasaki,Kanagawa Prefecture; in 2005 one was established inShanghai,China, and one inIndia. A future facility in the US will be inBerkeley Heights, New Jersey.From 1988 to 1989, LOral controlled the film company Paravision, whose properties included theFilmationandDe Laurentiislibraries.StudioCanalacquired the Paravision properties in 1994.LOral purchased Synthlabo in 1973 to pursue its ambitions in the pharmaceutical field. Synthlabo merged withSanofiin 1999 to becomeSanofi-Synthlabo. Sanofi-Synthlabo merged withAventisin 2004 to becomeSanofi-Aventis.On 17 March 2006, L'Oral purchased cosmetics companyThe Body Shopfor562 million.L'Oral'sadvertising sloganis "Because I'm worth it". In the mid 2000s, this was replaced by "Because you're worth it". In late 2009, the slogan was changed again to "Because we're worth it" following motivation analysis and work into consumer psychology of Dr. Maxim Titorenko. The shift to "we" was made to create stronger consumer involvement in L'Oral philosophy and lifestyle and provide more consumer satisfaction with L'Oral products. L'Oral also owns a Hair and Body products line for kids calledL'Oral Kids, the slogan for which is "Because we're worth it too".In 1987, during the growth years of the mail order business, L'Oral and3 Suissesfounded Le Club des Crateurs de Beaut for mail-order sales of cosmetic products, with brands including Agns b., Cosmence and Professeur Christine Poelman among others. In March 2008, L'Oral acquired 3 Suisse's stake, taking sole control of the company. In November 2013, L'Oral announced that Le Club des Crateurs de Beaut would cease activity in the first half of 2014. In November 2012, L'Oral inaugurated the largest factory in theJababeka Industrial Park, Cikarang, Indonesia, with a total investment of USD$100 million.[8]The production will be absorbed 25 percent by domestic market and the rest will be exported. In 2010, significant growth occurred at Indonesia with 61 percent increase of unit sales or 28 percent of net sales. In January 2014, LOral finalised the acquisition of major Chinese beauty brand Magic Holidings for $840 million. On 11 February 2014 it was announced that L'Oreal had sealed a deal worth 3.4bn to buy back 8% of its shares from Swiss consumer goods giant Nestle. As a result of the deal, Nestles stake in LOreal will be reduced from 29.4pc to 23.29pc while the Bettencourt Meyers familys stake will increase from 30.6pc to 33.2pc. Nestle has owned a stake in LOreal since 1974 when it bought into the company at the request ofLiliane Bettencourt, the daughter of the founder of LOreal and world's richest woman, who was trying to prevent the French state's intervention in the company.On 20 February 2014, Shiseido agreed to sell its Carita and Declor brands to LOral for 227.5 million (USD$312.93 million (2014)). On 18 June 2014, L'Oral agreed to acquireNYX Cosmeticsfor an undisclosed price, bolstering its makeup offer in North America where its consumer-products unit has faltered. In September 2014, LOral announced it had agreed to purchaseBrazilianhair care company Niely Cosmeticos Group for an undisclosed amount.

Brands are generally categorized by their targeted markets, such as the mass, professional, luxury, and active cosmetics markets. The Body Shop and Galderma are directly attached to the head office. L'Oral also owns interests in various activities such as fine chemicals, health, finance, design, advertising, insurance. Professional products L'Oral Technique L'Oral Professionnel, including ARTec and Innate Krastase(created by L'Oreal in 1964) Kraskin Esthetics, created by L'Oreal in 2007 and specializing in skin care professionals. Matrix Essentials, founded by Arnie Miller in 1980 and acquired by L'Oreal in 2000. Mizani, founded in 1991 and bought by L'Oreal in 2001. PureOlogy Research, founded in 2001 and acquired by L'Oreal in 2007. Redken5th Avenue NYC, founded byPaula KentandJheri Reddingin 1960 and acquired by L'Oreal in 1993. Shu UemuraArt of Hair

L'Oreal Luxe Lancme YSL Giorgio Armani Biotherm Cacharel Diesel Maison Martin Margiela Ralph Lauren Kiehl's The Body Shop Shu Uemura Stella McCartney Clarisonic Paloma Picasso Drakkar noir Urban Decay Yue Sai Helena Rubinstein EMMichelle Phan Declor Consumer products LOral Paris Ombrelle Garnier Maybelline SoftSheen-Carson Crateurs de Beaut Essie Magic

Active cosmetics Vichy La Roche Posay Inneov Skinceuticals Roger&Gallet Sanoflore Dermablend EM Michelle Phan

Board of directorsCurrent members of the board of directors of LOral are: Jean-Paul Agon, Chairman and CEO Jean-Pierre Meyers, Vice-Chairman of the Board of Directors Peter Brabeck-Letmathe, Vice-Chairman of the Board of Directors Franoise Bettencourt Meyers, Director Paul Bulcke, Director Charles-Henri Filippi, Director Xavier Fontanet, Director Bernard Kasriel, Director Christiane Kuehne, Director Marc Ladreit de Lacharrire, Director Jean-Victor Meyers, Director Virginie Morgon, Director Annette Roux, Director Louis Schweitzer, DirectorManagement committeeThe management committee includes: Jean-Paul Agon, Chairman and Chief Executive Officer Laurent Attal, EVP Research and Innovation Jean-Philippe Blanpain, EVP Operations Nicolas Hieronimus, President Selective Divisions Brigitte Liberman, President Cosmetic Active division Marc Menesguen, President Consumer Products Division Christian Mulliez, EVP Administration and Finances Alexis Perakis-Valat, EVP Asia Pacific Zone Alexandre Popoff, EVP Eastern Europe Zone Sara Ravella, EVP Communication, Sustainability and Public Affairs Frederic Roz, EVP of the Americas Zone Geoff Skingsley, EVP Africa - Middle East Zone An Verhulst-Santos, President Professional Products Division Jrme Tixier, EVP Human Resources and Advisor to the Chairman Johen Zaumsel, EVP Western Europe Zone

As at year end 2013: Breakdown of share ownership: 33.31% by theBettencourtfamily, 23.29% byNestl, 21.8% by international institutional investors, 9.3% by French institutional investors, 5,7% by individual shareholders, 1.9%treasury stockand 0.7% by employees.

In 2003, LOral announced its 19th consecutive year of double-digit growth. Its consolidated sales was 14.029 bn and net profit was 1.653 bn. 96.7% of sales derived from cosmetic activities and 2.5% from dermatological activities. LOral has operations in over 130 countries, employing 50,500 people, 24% of which work in France. 3.3% of consolidated sales is invested in research and development, which accounts for 2,900 of its employees. In 2003, it applied for 515 patents. It operates 42manufacturingplants throughout the world, which employ 14,000 people. Cosmetics sales by division breakdown: 54.8% from consumer products at 7.506 bn, 25.1% from luxury products at 3.441 bn, 13.9% from professional products at 1.9 bn, and 5.5% from active cosmetics at 0.749 bn. Cosmetic sales by geographic zone breakdown: 52.7% fromWestern Europeat 7.221 bn, 27.6% fromNorth Americaat 3.784 bn, 19.7% from rest of the world at 2.699 bn. In 2007, LOral was ranked 353 in theFortune Global 500.The company had earned $2,585 million on sales of $19,811 million. There were 60,850 employees.

Since the 80's, LOral has invested 900 million in researching alternatives to animal testing for product safety, using methods such as reconstructed skin models, like the Episkin model[23]at their research centers in Gerland, France, andPudong, China.Nevertheless, this is complicated by markets such as China,where animal testing of all cosmetics for human use is obligatory.Cosmetics by brands such as The Body Shop, which refuses t