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L'Oréal Pulls Brand from China

January 8, 2014

Garnier is out, Maybelline and L'Oréal Paris will stay

Suddenly, there's a rush to the exit of what, until months ago, was considered the world's fastest-growing consumer product market. Today, L'Oréal announced it was pulling its Garnier brand in China, just days after Revlon Inc. outlined plans to exit the country.

L’Oréal introduced Garnier to China in 2006. Now, the company will focus on marketing the L’Oréal Paris and Maybelline brands there. The announcement is the latest indication of a slowdown in Chinese demand. In May, Procter & Gamble said it has been losing market share in skin and oral care sales. And Revlon will cease operations and eliminate 1,100 positions in China.

Garnier accounts for about 1% ($20.4 million) of L’Oréal’s Chinese sales. China is the third largest cosmetics market in the world, with nearly $26 billion in sales and is expected to grow 63% for the five years to 2015, according to Euromonitor International.

“We believe this will enable our consumer-products division to accelerate its conquest of the Chinese beauty market,” Paris-based L’Oréal said in a statement. “We are committed to ensure a smooth transition process will be put in place for our employees and associates.”

The company’s nine-month Chinese sales rose 11%, L’Oréal said in October. The beauty market in the country is “slowing, although still dynamic,” the cosmetics maker said at the time.

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