Agon In Command

A lifelong sailor, Jean-Paul Agon, Chief Executive Officer of L'Oréal, has no fear of uncharted waters, even in the roughest of seas.

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"We still have the ambition to grow our business in North America and Europe," he continues, "but if you're able to grow your business in the rest of the world by between 12 percent and 15 percent a year, mathematically it helps you a lot. It accelerates
your growth worldwide."

Since he was named ceo, market sources have speculated about the possibility of making more acquisitions. "It's kind of a paradox," he says. "But an acquisition for us is first and foremost an opportunity for future organic growth. We're not looking for an acquisition that increases our size," he says, underscoring the point by citing Maybelline New York as an example. The color cosmetics brand was doing a little less than 200 million euros when Owen-Jones decided it could go global. Now a decade later, it's number one in the world with 1.4 billion euros or $1.9 billion in sales. Ffor 10 years, the Maybelline acquisition has fueled the organic growth of the company.

"We have to be opportunistic and pragmatic, and if there are opportunities to attack new segments or new markets or with a new positioning that we don't have in our portfolio, we should look at it," he continues. Agon adds, "Sometimes people think that we won't be able to use our money because there are no targets in the beauty industry. don't agree. There are and will be interesting opportunities," he says, declining to give examples.

Instead, he points to three major moves in 2006, the acquisition of Body Shop, Laboratoires Sanoflore and the license with Diesel. The Body Shop deal caused the most stir because at first blush, it appeared that was flirting with retailing. But Agon has been tireless in knocking down that notion. A retailer, like Macy's and Wal-Mart, sells the brands of others, he maintains.
The Body Shop simply is a brand with an integrated distribution system with its own retail outlets, no different from Kiehl's, Gucci, Chanel or Hermès. "Who ever said that Hermès is a retailer?" Agon asks. "They believe that in order to communicate
the magic of the brand, it's very important to sell the brand in their own stores." Alluding to the Body Shop's founder, Anita Roddick, he says, "Because she invented a brand that was different from the existing brands, either in mass or luxury, she realized that in order to communicate the values and maximize the experience of her brand, she needed to sell it in her own stores."

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