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L'Oreal Says To Get Ready for a Roaring 20s Beauty Boom

Jean-Paul Agon's post-Covid predictions, comments on L'Oreal's sales, and on passing the torch to Nicolas Hieronimus.

Marie Redding, Senior Editor02.18.21

Several publications report that the beauty industry—and consumers—might soon experience the "roaring 20s of makeup" — a now-famous comment made by Jean Paul Agon, CEO, L'Oreal.

Agon said this during L'Oreal's Financial Meeting on February 12, 2021 (fast-forward to 1:37:10 to hear it first-hand) when a journalist asked, "What do you think will be the catalyst for makeup rebounding from Covid?"

Agon responded by saying:

"One day Covid will be gone...people will be happy to go out again, to celebrate, to socialize— and it will be like the famous roaring 20s—this will be the fiesta of makeup and fragrances."

Agon also explained that even even though L'Oreal "weathered the crisis remarkably," mask-wearing and staying at home affected makeup, as well as the company overall, in a big way in 2020. However, referring to makeup sales, Agon said firmly, "I am absolutely sure it will come back."

Agon explained that "the makeup drop" last year was L'Oreal's "most severe handicap...even stronger than the closing of stores." Makeup represents 34% of sales of L'Oreal's consumer division. (See L'Oreal's full 2020 Annual Results report for more.)

L'Oreal Is On Track for Growth This Year

Optimistic about L'Oreal's growth track for 2021, Agon says the Covid crisis prepared the company for future growth. He pointed out several ways in which the company will continue to cut costs after the pandemic.

Agon implied that employees might continue to travel less after the pandemic and attend fewer in-person meetings. He explained:

"This was an opportunity to reset...We eliminated certain costs...this was an opportunity to find new ways of working...and this will have a positive impact going forward....We will do things differently than we did before."

And, he said, "Putting on lipstick again will be a symbol of returning to life."

Agon also mentioned that the company would continue to reduce budgets related to the cost of doing business in brick-and-mortar stores, such as merchandising expenses, as ecommerce sales continue to rise as expected—and these changes will have a significant positive impact, Agon predicts.

Brick-and-Mortar Will Still Be Relevant

By distribution channel, "there were monumental shifts," Agon said. E-commerce soared—and "continued to accelerate even as stores reopened," he explained, referring to the mandatory store closures in 2020.

Will ecommerce replace brick-and-mortar stores?

"Beauty is a category that needs to be smelled and touched in stores," said Nicolas Hieronimus, who will take over as CEO on May 1 when Agon steps down. He explained that even though ecommerce sales have risen, and even if they remain at 50% of all sales, "brick-and-mortar will represent the other 50%—and it needs to continue to be exciting."

Maybelline's Sky High Mascara Keeps Selling Out

By distribution channel, "there were monumental shifts," Agon said. Ecommerce soared—and "continued to accelerate even as stores reopened," he explained, referring to the mandatory closures in 2020.

Hieronimus mentioned Maybelline's Sky High Mascara and its TikTok success as an example of the importance of ecommerce.

"We leveraged the power of digital," he commented. "We cannot keep it on shelves now—and we cannot keep it on stock on Amazon. Consumers have made it a huge success," he said. "We leveraged the power of digital," he added.

Skin Care Is The Fastest-Growing Category

Makeup and fragrance "suffered most," Agon said, from staying at home more and wearing masks—but skin care grew last year.

"Skin care is the biggest and fastest-growing category and now represents 40% of our sales," Agon said.