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Discover more about L'Oréal Luxe in 2016: http://www.loreal-finance.com/eng/annual-report-2016/loreal-luxe
Explore the full 2016 L'Oréal Annual Report http://www.loreal-finance.com/eng/annual-report-2016
Interview with Nicolas Hieronimus, President Selective Divisions
Today we are at the Urban Decay shop on rue des Franc-Bourgeois in Paris, which is an excellent example of our branded boutiques know-how, notably in the rapidly expanding make-up market as well as of our D2C – Direct-to-Consumer - strategy. It is the brand’s first boutique in France. You can find everything, but especially exclusive products. It is ultra-digitalised with a giant screen, an interactive GIF Photobooth and a terminal for virtually testing the 100 Vice Lipstick shades. We give consumers an enriched customer experience at our branded stores. Our innovation is visible worldwide, from the new ultramodern Yves Saint Laurent and Armani corners, to Lancôme make-up bars, to the latest Shu Uemura installations and Kiehl’s boutique openings and renovations.
- How would you sum up the year 2016 for the Division?
It was a very good year for L’Oréal Luxe. We finished 2016 with +6.9% growth on a like-for-like basis and +6.0% in reported figures. For the sixth consecutive year, L’Oréal Luxe outperformed the market, confirming the sustainability of our growth in a constantly changing world.
L’Oréal Luxe continues to win over market shares in every region. We performed solidly in Western Europe, notably in Spain and Great Britain. The New Markets have been particularly dynamic, with double digit growth in China, Japan, Australia, South Asia and Russia. And I also want to underline our excellent performance in the USA, supported by the contributions from various brands, Lancôme, Urban Decay, Yves Saint Laurent, Armani, and now IT Cosmetics.
In 2016, we also confirmed the relevance of our winning strategic bet on make-up. All our make-up brands – Lancôme, Urban Decay, Yves Saint Laurent, Armani and Shu Uemura – experienced strong growth in 2016. We confirmed our successes in women’s fragrances with La Vie Est Belle, which is already No.1 in Europe and continues to grow in the Top 5 in the USA, Sì and Black Opium are in the Top 10, and we launched Mon Paris with success last June, notably attracting American and Chinese consumers.
Urban Decay pursued its worldwide expansion and is now present in 45 countries. And Kiehl’s continues to grow, capitalizing on naturality, on the seriousness of its pharmaceutical origin and on personalization. In general, the share of our “new luxury” brands and their contribution to L'Oréal Luxe’s growth were further strengthened.
- What were the significant achievements and growth drivers in 2016?
I would like to underline 6 major milestones for 2016:
• First, the contribution from e-commerce, which reached over 10% of our global sales, up by +34%.
• Yves Saint Laurent, of course, which has topped the one billion euros mark after an exceptional year. The brand is quite a phenomenon!
• Kiehl’s pursued its growth and reached one billion dollars in net sales.
• Lancôme confirmed its No.1 ranking worldwide amongst prestigious women’s brands and became the second leading beauty brand on the American selective market.
• Urban Decay became No.2 in the selective American make-up market, up two ranks from 2015.
• And our portfolio was reinforced with the acquisition of two “new luxury” brands. IT Cosmetics, a high-growth American brand specialized in skin loving make-up and hybrid products that recently launched a skincare line off to a very good start. And then, of course, there is Atelier Cologne, an expert niche perfumery brand which is an ideal complement to our range of fragrance collections.
- What are the major challenges for tomorrow?
One of the biggest challenges is to constantly adapt to the new world. We need to be increasingly agile and adaptable. We have learnt to reconcile the long-term aspect of luxury products – quality, brand heritage and sustainability – with the short-term requirements of today’s world – speed, flexibility, data management. And we have to continue to strengthen in both domains.