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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While the idea of a retail store that bears the name of a mass beauty brand may be novel to mass, it’s one that has worked in the prestige industry. L’Oréal’s Biotherm brand already operates stores in Hong Kong and the U.K. A Glendale, Calif.-based Biotherm store in the Glendale Galeria is planned for September.

Lancôme, another prestige L’Oréal property, is giving its L’Institut Lancôme a facelift on the Rue du Faubourg Saint-Honoré in Paris, which is set to reopen in September. The brand also recently opened a concept store in Shanghai and is planning one in Seoul, plus a third Hong Kong door by year’s end. A New York version is on the way, too, according to published reports.

Clearly, consumers are already familiar with L’Oréal’s different product brands and offerings. L’Oréal Consumer Products’ business has generally produced double-digit year-in, year-out retail sales for the last 18 years.

L’Oréal Paris maintains a 15.6 percent dollar share of beauty, an $11 billion category for 2003. Its size is attributable to its successful entry into every beauty category, and its products deliver. All rank in the top five in the categories in which they compete.

In hair color, the division’s largest segment, L’Oréal Paris captures 47 percent of dollar share of the market. It makes three out of the top four hair color brands: Preference, Excellence and Féria. (Company-wide, L’Oréal’s dollar market share, which includes sales of Garnier hair color, bumps up to 55.2 percent.)

In cosmetics, L’Oréal Paris’ share has grown about a half a point to 15.5 percent dollar market share. True Match, a 24-item foundation line launched this year, already claims a 6 percent dollar market share. The division’s lipstick business has grown about 0.7 of a share point this year to 16.2 percent.

Skin care, an area where L’Oréal Consumer Products sees the most opportunity for growth, has reached consumers well. L’Oréal Paris’ Wrinkle De-Crease, a technology to help reduce expression lines, has jumped to about a 4.5 percent dollar share since its launch, and Revitalift, L’Oréal’s number one skin care brand, is up 27 percent, year to date, with a 5.9 dollar share of moisturizers-treatments.
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