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The L’Oréal Connection: Firm Seeks Brand Boost With Move Into Retail

L’Oréal’s consumer products group president said the $2.5 billion unit must maintain the individuality of its brands to compete with top...

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“That’s how intriguing it is,” Campinell said. “The economics are tough, but there’s going to be an evolution in retail, and we’re going to be a part of it wherever it makes sense.”

Carol Hamilton, president and general manager of the L’Oréal Paris division of the L’Oréal Consumer Products Group, is most proud that L’Oréal has been able to design the store, and its merchandising capabilities, from the bottom up. Being a complete beauty brand — L’Oréal offers products in every beauty category, from nail care to hair care — will allow the store and L’Oréal to offer head-to-toe beauty in a way that’s new to the consumer.

“The value in this is that L’Oréal owns everything, and for the first time, we will be able to put our products in the environment we think is consistent with our image,’’ she said. “We’ve never had a three-dimensional space to express the core values of the brand. This will allow us to understand the brand and also to evolve the brand in a very important way.

“[Retailers] assume we are going to bring them great products. We have some expertise in that area, but what I feel is that we will be able to be a much more valuable partner because I’ll be dealing with [some of their issues] and we will come up with solutions.”

William Steele, a consumer analyst at Bank of America who covers Procter & Gamble, said P&G likely wouldn’t follow L’Oréal’s lead in this area, instead continuing to rely on its extensive focus groups to garner opinion.

“[The L’Oréal store] is an interesting initiative, but I really don’t see Procter getting into the retail business,” he said.

Steele said that several years ago, P&G did open a single Reflect.com store — a brick-and-mortar version of its online beauty store — in San Francisco, but it was short term.

“From a mass market perspective, I don’t know what Procter & Gamble would gain from opening a single store in a single city,’’ he said. “I don’t see what it brings to the table.”
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