Business Story: The story of Loreal Paris and the people behind the largest cosmetic company
Eugène Paul Louis quoted "A single small idea carried forward every day over many years can take you to the other side of the world." L'oreal Paris, the brand ruling the cosmetic industry was a small idea carried ahead by Eugène and his successors.
Louis developed a hair dye formula called Oréale. He used to sell this to Parisian hairstylists. His discovery of Oréale made him start his company Safe Hair Dye Company of France, known as L'oreal today. In 1920 he started his company with three chemists, which now consists of 88,000+ employees.
L'oreal was formed because of one idea of a hair dye formula but now it is the world's largest cosmetic company. It has diverged into other makeup, skincare, and perfume products.
It performs in the following segments: Professional products, Customer products, L'oreal Luxe, and Active cosmetics. Customer Products are sold in retail channels whereas Professional Products are sold to hair salons.
The sales were up even during the war which enabled the company to procure raw materials.
Liliane Bettencourt, daughter of Eugène Paul Louis, who was fifteen when she joined her father's company as a trainee, used to label the bottle. She married Andrew Bettencourt, who became the deputy chairman of L'oreal. After her father's death, she became the principal shareholder and had a majority stake even when the company went public in 1963. But in fear of nationalization of the company after the French elections in 1974, Liliane sold half of her stake for a three percent stake in Nestle. After the completion of her tenure, her grandson Jean-Victor was appointed as the company's director. Liliane's daughter Françoise got half of her fortune after Liliane's death.
The company has made twenty-five acquisitions and eight investments so far. L'Oréal has spent $1.20B on the acquisitions.
After Françoise, a research and development frontier, Charles Zviak became CEO (1984-1987), this was a period of growth for L'Oréal. The company made significant investments in the field of research.
Lindsay Owen Jones became the Chief Executive Officer of the company(1988-2005). He developed the company into the largest beauty-products company through global marketing and product line diversification. Lindsay acquired many brands which include Ralph Lauren fragrances, preference hair color, Garnier, and Redken hair salon products.
In 2006, Jean-Paul-Agon became the CEO of the company and in 2011, he became the chairperson of the company. He emphasizes on universalization of beauty, that is, beauty for all.
L'Oréal concentrated on international marketing, product line diversification, and strategic purchases, which made the business grow.
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