In 20 years, the turnover of this "small company" named L'Occitane, specialized in cosmetics and located in Manosque in the south of France, will have jumped from 8 million euros to 1.3 billion euros. With a foothold in no less than 90 countries, the French company relies on 3,000 stores, (including 1,500 owned stores) and employs some 8,600 employees.
At the helm of the company an Austrian entrepreneur, Reinold Geiger, keeps a rather low profile, although his career path has fueled many a case study. But the man remains clear-headed. "There are always some challenges to be met," he explains in this interview. Among these, there is one which is dramatically changing habits in the sector: e-commerce.
Jean-Yves Bourgeois: Brazil, Japan... these are two major "conquests" for L'Occitane in past months?
Reinold Geiger: This was actually one of the first decisions I made when I took over this business almost twenty years ago: to concentrate on Asia, and Japan in particular—a country with a reputation of being difficult to access and about which, some advised me not to set foot in. Today, Japan represents nearly 20% of our sales. I must obviously like difficult challenges because, for Brazil, where we recently opened a factory, the picture was almost the same, yet I was confident. We mustn't t forget that this country is one of the five largest perfume and cosmetic markets in the world. L'Occitane has already opened 175 stores in Brazil. I remain convinced that this country will continue to develop and that we will be up and ready when the local economy turns around.
Bourgeois: The world is changing fast. Sales of products on the Internet are exploding. Younger generations obviously do not have the same consumption habits as their elders. Is this a real challenge for you?
Geiger: This is undoubtedly one of the biggest challenges facing the entire cosmetics industry. As far as we are concerned, it is out of the question for us to miss this opportunity. Today online sales represent about 15% of our revenues. Digital is changing the role of stores. They are becoming places to discover the brand and its products, even if the customer's journey continues elsewhere. Clearly, we must quickly integrate these new consumption habits and change our business model accordingly because the younger generations, our future customers, are fully connected.
Bourgeois: You are actually experimenting with this new commercial adventure with your recent acquisition in the United States, of Limelight by Alcone, renamed this year LimeLife, a brand specialized in the direct selling of cosmetics and particularly of makeup products. What ideas is this giving you?
Geiger: At first we acquired a 40% stake in the company and this year, we increased this participation to more than 60%. This acquisition not only enables us to enrich our portfolio based on natural ingredients but also to set foot in the area of makeup, while discovering direct sales on the Internet. And sales prospects are impressive. Just to give you an idea, this young company, after only three years in operations, had already achieved $68 million in sales, and this year we are going to cross the $120 million mark. We recently launched the brand in France and we will launch it next month in Brazil and next year in Japan.
Bourgeois: At a time of rising global awareness concerning environmental challenges, you have always tried to anticipate. What new initiatives are you going to take?
Geiger: When the trend for ethical charters, Company Engagement Departments and other responsible values were starting to emerge we were already setting up and adopting an environmental and human-based approach—whether in profit sharing, with a participation system for all employees, or for production where we chose to adopt the fair trade rules. As you know, we work with natural actives, by establishing multiple partnerships with growers and farmers. We have built a sector that goes from the crops to the consumer, respecting nature and cultivation methods. We constantly strive to limit the environmental impact of our activities at every stage of the product's life. From the formulation, to the eco-design of our packaging, through the production and distribution in stores, we are engaged in a process of continuous improvement to respect the environment and reduce our footprint.
As for new initiatives, we have recently opened a very large store on Regent Street in London (five times the usual size!), and also a very large store with a Pierre Hermé / L'Occitane restaurant on the Champs Elysée in Paris, and finally a very large store in Shibuya, one of the busiest and trendiest districts of Tokyo with a café Pierre Hermé. Finally, we are working on a revolutionary face care concept.
Photos: courtesy of L'Occitane