Sales: $1.4 billion
Key Personnel: Reinold Geiger, executive director, chairman and chief executive officer; André Hoffman, executive director, vice chairman and managing director; Domenico Trizio, executive director and managing director; Thomas Levillon, executive director and group deputy general manager, finance and administration; Karl Guénard, executive director and joint company secretary.
Major Products: Personal care, skin care and fragrance sold under L’Occitane en Provence, L’Occitane au Brésil, Melvita, Le Couvent des Minimes and Erborian.
New Products: Divine Harmony face care products, Terre de Lumiêre fragrance.
Comments: Sales rose 3.2% last year and, unlike some other members of The International Top 30, L’Occitane reported good gains in China and Brazil, in addition to growing contributions from emerging brands. On the topic of emerging brands, earlier this year, in May, L’Occitane spent $128 million on LimeLight by Alcone; the purchase will speed up the company’s expansion in the color cosmetics segment, and LimeLight itself will be expanded outside the US. In fact, thanks to LimeLight’s direct and online sales model, CEO Reinold Geiger told L’Occitane’s shareholders that expanding LimeLight’s reach should involve minimal investment. That may be optimistic, but then, L’Occitane has had great online success during the past year.
The number of stores rose nearly 4% to 3,037 as of March 31, 2017. L’Occitane added 24 stores in Asia-Pacific, 26 in the Americas and closed one for all of Europe and South Africa. Meanwhile, the group accelerated expansion of its emerging brands with 29 net store openings. Through March 2017, there were 54 Melvita stores, 36 L’Occitane au Brésil stores and five Erborian stores.
By region, Japan accounts for 18% of sales, followed by US (13%), China (11%), Hong Kong (9%), France (8%), UK (5%), Russia and Brazil (4% each) and Taiwan (3%). The rest of world accounted for 25% of sales. China, Japan, Brazil and “other countries” were the primary growth drivers. Sales in Brazil soared 30% thanks, in part, to favorable exchange rates, while sales in Japan jumped 15.5% to record levels. Sales in China improved nearly 6%, due to a second-half rebound in sales. Russian sales rose 9%, despite the recession. Sales in Taiwan were relatively flat and French sales fell about 1%. Hong Kong’s sales fell 10.3%. US sales fell 1.1% and a weak pound caused UK sales to tumble 13.4%. During the year, L’Occitane jettisoned the Le Couvent des Minimes brand.
L’Occitane may be rooted in traditional retail, but the group knows its future is online. The Click and Collect pilot program is expected to be expanded beyond Europe, and management is studying ways to make the online/in-store shopping experience a seamless one.